NEW DELHI: The big four accounting firms have joined the fray to become the resolution professional (RP) of Go First after its lenders invited proposals from them as well as Grant Thornton, people aware of the development said.
Go First is currently under the administration of an interim resolution professional (IRP) recommended by its former management.
Lenders, however, are of the view that multiple firms should be evaluated before they zero in on a choice for the role of RP, the sources said. Professionals backed by KPMG, Deloitte, EY, PwC and Grant Thornton are expected to be interviewed this week, they said.
Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank are amongst lenders to the airline.
The National Company Law Tribunal (NCLT) had appointed Abhilash Lal, who is backed by Alvarez & Marsal, as Go First’s IRP in an order delivered on May 10 when it admitted the company for insolvency proceedings. Lal was suggested by Go First’s management.
But the lenders are keen to check out other options as well, executives cited above said.
As per the rules, creditors have a right to appoint a resolution professional of their choice once the committee of creditors of an insolvent company is convened post a court order.
The resolution professional takes over the management of the company once it is admitted by the insolvency court, checks out its financial position, verifies assets and liabilities, and, if needed, raises funds to keep it as a going concern, besides handling its debt resolution process along with the creditors.
When contacted, EY and Deloitte declined to comment. Queries sent to KPMG and Grant Thornton were not answered till press time Tuesday. PwC executives were unavailable for comment.
Go First filed for insolvency under Section 10 of the Insolvency and Bankruptcy Code (IBC), which allows a company to voluntarily submit itself to a court process for debt resolution when its business becomes unviable.
Go First’s total dues to banks and financial institutions are pegged at around Rs 6,000 crore. In its application for voluntary insolvency with NCLT, Go First said it had defaulted on payments of Rs 2,600 crore to aircraft lessors and of Rs 1,200 crore to vendors. The company said it had filed for insolvency because several of its aircraft remained grounded due to defective engines supplied by Pratt and Whitney.
Go First’s accounts with its bankers are still classified as standard.
Aircraft lessors led by SMBC Capital have opposed Go First’s admission into insolvency proceedings as this would result in a moratorium on all assets of the company and prevent the lessors from repossessing planes.
They had approached the National Company Law Appellate Tribunal (NCLAT) against the NCLT order but the appellate tribunal on Monday upheld the bankruptcy court’s decision.