SpiceJet, Two Other Companies In Race To Bid For Crisis-Hit Go First: Report

Crisis-hit Go First, owned by the Wadias, filed for voluntary insolvency before the National Company Law Tribunal (NCLT) in May

Go First's dues to banks and financial institutions are estimated to be around Rs 6,000 crore.

Source : Getty

Spicejet, Sharjah-based Sky One company, and Africa-focused Safrik Investments have reportedly shown interest in buying the bankrupt carrier Go First, according to a report by CNBC-TV18. According to the report, the three firms have requested the resolution professional (RP) overseeing Go First's corporate insolvency resolution process (CIRP) to conduct due diligence on the grounded airline. ABP Live, however, couldn’t independently verify the report.

As per the report citing banking sources, the request came in after the deadline for submitting proposals passed and with lenders considering the possibility of liquidating the airline. Crisis-hit Go First, owned by the Wadias, filed for voluntary insolvency before the National Company Law Tribunal (NCLT) in May.

According to news reports, Go First's dues to banks and financial institutions are estimated to be around Rs 6,000 crore. The airline said in its application to the NCLT that it had defaulted on payments of Rs 2,600 crore to aircraft lessors and Rs 1,200 crore to vendors. The company attributed its insolvency filing to the grounding of several aircraft due to defective engines supplied by US-based aerospace manufacturer Pratt and Whitney.

Indian airline SpiceJet is considered a serious contender but the company’s ongoing struggle for its survival has led bankers to approach the situation with scepticism. The proposed fund infusion is expected to support SpiceJet in its potential acquisition of Go First, sources said.

Last week, SpiceJet announced plans to raise more than Rs 2,250 crore by issuing up to 130 million convertible warrants and 320.8 million fresh equity shares at an issue price of Rs 50 each. The airline would issue these convertible warrants to 64 allottees, including Prabhudas Lilladher Advisory Services, LKP Finance, Martina Developers, and Fincon.

Lenders of Go First are scheduled to convene a meeting later this week to make decisions on the future course of action, sources said, while adding that airline's financial health, including its substantial liabilities, was a significant factor in the ongoing resolution process and discussions with creditors.

SpiceJet shares jumped to Rs 64.21 apiece, up 19.84 per cent on Monday on the BSE.