Wadias may seek IBC rule waiver to bid for Go First

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The Wadia Group, which owns Go First Airlines, could seek a waiver from the Insolvency and Bankruptcy Code (IBC) rules that bar promoters from bidding for their own companies because the cash-strapped carrier’s account with banks is still marked as standard.

Defaulters are prevented from submitting a resolution plan for an insolvent company. The Wadia Group is likely to push for a one-time settlement with banks under which creditors will take a “substantial haircut”. The Wadia Group has not defaulted on payment to creditors till date,and hence will not be barred from offering a resolution plan. Experts say that in a way, Go First has shown the way for financially struggling firms how to protect itself and work on coming back to life. Several cases in the IBC have been resolved with lenders taking almost 50-70% haircut on loans.

Meanwhile, lessors on Thursday urged DGCA to deregister 23 Go First aircraft to secure their assets before the insolvency process begins. A moratorium ordered by the NCLT prohibits institution and continuation of suits and recovery of assets by owners and lessors.

Go First has blamed engine manufacturer Pratt & Whitney for its woes and said recurring defects and non-availability of spare engines resulted in prolonged grounding of its aircraft and loss of revenue. Pratt & Whitney on its part said Go First has a long history of missing payments. But the US engine maker  had more trouble coming with the German airline Lufthansa also grounding almost one-third of its Airbus 220 fleet run by P&W engines.