Wadia Group, the former promoters of Go First that is currently under the insolvency proceedings, is reportedly set to bid for the beleaguered airline. The group is said to be in talks with private equity funds and alternative investment funds to jointly bid for Go First.
This comes after the resolution professional of Go First Invited Expression of Interest from investors. The company put up advertisements in newspapers on Monday inviting investors.
People in the know said that the Wadia Group is expected to be part of the insolvency process. According to a report in The Economic Times, the group has taken opinion from lawyers to confirm that they are eligible to bid for the airline as they have not defaulted on the loans.
According to Section 29A of the Insolvency and Bankruptcy Code (IBC), a person or entity is ineligible to bid for an asset if it is declared a wilful defaulter or if they are promoter of a company that has been classified as a non-performing asset (NPA).
When the company had filed for a voluntary insolvency application in NCLT, the airline had not defaulted. The airline had told the court that it had not defaulted until April 30. Go First had filed for the voluntary insolvency proceedings on May 3.
A banker in the know told news agency Reuters, “There has always been intent and inclination from the Wadias to keep the airline afloat.” “They are not disqualified by law to bid for the airline because there has technically been no default,” this banker said.
However, the banker said that there is no formal indication to banks that the Wadia Group will submit an EoI but the likelihood is that they will.
While filing for its insolvency proceedings, Go First had blamed Pratt & Whitney engines for the grounding of about half its 54 Airbus A320neos, but the engine maker had said the claims are without merit.
(With Reuters inputs)