Cash strapped airline SpiceJet has expressed interest with the Resolution Professional (RP) of Go First and confirmed that it wishes to submit an offer post diligence, the company said on Tuesday.
In an exchange filing, the airline said that the acquisition proposal is with a view to create Go First as “a strong and viable airline in a possible combination with SpiceJet.”
ET had reported yesterday that SpiceJet along with two other companies, Sharjah-based aviation company Sky One, Africa-focused Safrik Investments, had expressed interest in acquiring bankrupt carrier Go First, in an unexpected development weeks after the deadline for making proposals passed and as lenders were considering its liquidation.
“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,” SpiceJet further said.
It also released its September quarter results, reporting a net loss of Rs 428 crore, which narrowed to less than half the year earlier loss of Rs 835 crore.
The Indian airline has also arrears to be cleared, including an arbitration award to former promoter Kalanithi Maran.
Shailendra Ajmera, the resolution professional (RP) managing Go First’s corporate insolvency resolution process (CIRP), received requests from these entities for conducting due diligence of the grounded airline during the past 10 days, people familiar with the matter had told ET. All of them have also sought an extension of the deadline, they said.
Lenders expect their arbitration claims to increase in time and are confident of getting more than half of their claims even in case P&W looks for an out-of-court settlement.
Go First owes creditors more than Rs 6,200 crore. Central Bank of India and Bank of Baroda are the top two creditors for the airline with Rs 1,934 crore and Rs 1,744 crore of dues, respectively.
Lenders have almost given up on Go First’s revival because of the delays so far in the resolution amid legal disputes with lessors of airplanes, the main assets for an airline.
Lessors have taken Go First to the Delhi High Court, seeking deregistration of the planes since the leases were terminated prior to declaration of a moratorium under the bankruptcy law on May 10. The court has yet to pronounce its judgement even as the aviation regulator, Directorate General of Civil Aviation, said in an affidavit that the recent order exempting aviation leases from bankruptcy moratorium should apply even to companies undergoing insolvency proceedings.
