Cash-Strapped SpiceJet Evinces Interest In Buying Bankrupt Go First Airlines

Cash strapped airline SpiceJet on Tuesday (19 December) said it has expressed interest to acquire bankrupt carrier Go First.

"SpiceJet Limited has expressed interest with the Resolution Professional of Go First and wish to submit an offer post diligence, with a view to creating a strong and viable airline in a possible combination with SpiceJet,” the company said in a regulatory filing.

Low-cost carrier Go First filed for insolvency resolution at the National Company Law Tribunal (NCLT) in May 2023 and is undergoing an insolvency resolution process.

According to insolvency filings, Go First, attributing its misfortune to the defective engines from Pratt & Whitney, owes at least Rs 11,463 crore collectively to banks, international lessors and vendors. Out of this sum, financial creditors, such as Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank, are owed a minimum of Rs 6,521 crore.

"The Board of the Company has recently approved and initiated process of raising fresh capital of about US$ 270 million to strengthen its financial position and provide resources to invest in growth plans,” the communication to the exchange noted.

It may be recalled that the last date for submission of the bids to acquire the airline was 22 November. The lenders began considering the liquidation of Go First as no bids were received by the final deadline.

To make matters more complex, apart from SpiceJet, two other companies, Sharjah-based aviation company Sky One and Africa-focused Safrik Investments have also expressed interest in acquiring bankrupt carrier.

All the three entities have approached Shailendra Ajmera, the resolution professional managing Go First’s corporate insolvency resolution process, for conducting due diligence of the grounded airline, an ET report said, adding that that they have also sought an extension of the deadline.