The Chennai bench of the National Company Law Tribunal (NCLT) has ordered liquidation of Coimbatore-based beleagured regional airline Air Carnival.
The order comes on the heels of failed attempts to find an investor for the now-grounded airline company.
Taking cognisance of the resolution of committee of creditors (CoC), recommending for the liquidation of the company, Ch Mohd Sharief Tariq, member (judicial), NCLT, ordered liquidation of the company.
NCLT had ordered commencement of corporate insolvency resolution process against Air Carnival in second week of November 2017, admitting a petition filed by its erstwhile employee Murali Sundaram (operational creditor) alleging default of wages to the tune of `48 lakh by the company.
The first meeting of the CoC was held on November 22, 2017 and it was noted that the asset value of Air Carnival was found insufficient to cover the outstanding of Syndicate Bank (financial creditor) which is amounting to `12.79 crore.
According to CoC, operation of the company as a going concern was found not possible and liquidation was seen as the only viable alternative.
However, in the second meeting held on February 7, 2018, one of the suspended directors of the company requested the committee to grant two months’ time for exploring revival chances, subject to availablity of any investor.
Subsequently, in the last CoC meeting on May 2, 2018, the director informed that he was unable to bring any investor despite his best efforts.
He further informed CoC that in his capacity as a guarantor, the land and building shown in the audited financial statement of the company, though stands in his name, belongs to the company and expressed his willingness to include the said land and building as part of the liquidation asset.
The CoC had deliberations on the revival issue, and found that since the company is an aviation firm, neither has an aircraft nor a valid licence from DGCA and concluded that pumping of investment towards hiring an aircraft was commercially unviable.
Accordingly, CoC passed a resolution for the liquidation of the company.
Based in Coimbatore with a hub at the Chennai international airport, Air Carnival was founded in 2013 as a charter airline.