Naveen Jindal Eyes Go First Amid Insolvency Saga
The promoter has submitted an expression of interest in buying the airline, according to two people familiar with the matter.
Naveen Jindal, the promoter of Jindal Steel and Power Ltd., has shown interest in venturing into airlines through the insolvent Go First.
The promoter has submitted an expression of interest in buying the airline, according to two people familiar with the matter. The expression of interest has been put out by Jindal Power, which is owned by Naveen Jindal's closely held company, Worldone Pvt.
This is an opportunistic play from the company, as it is looking for potential business in the aviation sector, the first of the two people quoted above told BQ Prime on the condition of anonymity.
It has also been revealed that since the company does not know about the functioning of Go First, due diligence will be done. After that, if it is found to be financially feasible, there might be a bid in about 6–12 months.
The development was first reported by the Economic Times.
As it happens, Go First lenders may need to open the door to other potential resolution applicants in the coming few days, as per the needs of the insolvency process.
The lenders may be forced to extend entry to others in the future if the process demands it, since one can't run insolvency with only one potential resolution applicant, the first person said.
Ever since the amendment to the scope of the moratorium in the Insolvency and Bankruptcy Code came through, which excluded aircraft, helicopters, etc. from the moratorium protections, the Go First issue has become even more complicated, the second of the two people quoted above said.
Lenders are in a wait-and-watch mode right now. There have been severe operational troubles at Go Air. Employees have started missing work, which is adding to the pressure, the second person said.
In May, Go First initiated a request for voluntary insolvency resolution proceedings before the National Company Law Tribunal. The airline has attributed its financial distress to issues with Pratt & Whitney's "defective and failing engines." The proportion of grounded aircraft resulting from Pratt & Whitney's problematic engines had steadily increased, rising from 7% in December 2019 to 31% in December 2020 and peaking at 50% in December 2022.
Despite being admitted into insolvency, the company remains entangled in a protracted legal dispute with its lessors concerning the ownership of leased aircraft and engines.