Banks Defer Meet, Await NCLT Order

“We cancelled today’s meeting because we decided to wait for an order on the case. It will now happen either on Saturday or Monday," said the banker cited above.

He added that lenders would not be able to discuss their strategy on the case unless there is a final order from the tribunal. On Thursday, the tribunal reserved its order.

Bankers are in a spot because a company that has been repaying on time will not come under a moratorium once admitted by the National Company Law Tribunal (NCLT).

According to a 19 January report by Acuite Ratings and Research Ltd, lenders to Go Airlines include Central Bank of India, Bank of Baroda, Axis Bank, IDBI Bank and Deutsche Bank. However, Axis Bank has clarified in a regulatory filing that it has no exposure to the airline. As per the Acuite Ratings report, the company owes banks ₹5,600 crore, including loans, and non-fund instruments like letters of credit.

On Tuesday, the airline announced its decision to approach the insolvency tribunal, citing “ever-increasing number of failing engines supplied by Pratt & Whitney’s International Aero Engines, LLC". This, it said, has resulted in the airline having to ground 25 aircraft as of 1 May.

Legal experts said the proposal for voluntary bankruptcy can be withdrawn before the Committee of Creditors (CoC) is constituted, which may take three to four weeks after NCLT accepts the application.