Go First acquisition: SpiceJet says keen on buying bankrupt airline, stock surges

SpiceJet on Tuesday said it has expressed interest to acquire embattled Go First and plans to submit its offer after carrying out due diligence of the bankrupt carrier. In a regulatory filing, the cash-strapped airline said that the acquisition proposal has been submitted with an intention to create Go First as "a strong and viable airline in a possible combination with SpiceJet".

"Please note that 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," said SpiceJet in a statement to bourses on Tuesday.

Go First stopped its operations on May 3 amid financial woes mainly triggered by Pratt & Whitney engine issues. It submitted its insolvency resolution plea at the National Company Law Tribunal (NCLT) on May 2.

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

On Tuesday, SpiceJet shares hit a 52-week high on BSE after it revealed its intention to buy Go First. SpiceJet shares surged more than 7 per cent in early trade. As of 11 am, shares of SpiceJet were up over 3.6 per cent.

At 12.20 pm, the shares were trading at Rs 66.78, up by 4 per cent.

Last month, Go First told the Delhi High Court that it had exhausted the funds provided by the Committee of Creditors and was dealing with a shortage of manpower and financial constraints. The airline had received interim financing of Rs 100 crore from the CoC for service maintenance costs.

Go First's resolution professional (RP) Shailendra Ajmera said Go First’s lessors had been blocking it from reviving its operations by filing petitions seeking the deregistration of its aircraft.

The NCLT has extended the corporate insolvency resolution process of the cash-strapped airline by 90 days till February 4, 2024.

The NCLT has asked the embattled airline to submit an action plan within the stipulated period of time. The tribunal said that if the airline fails to complete the resolution process in this 90-day period, it would initiate the liquidation process of the company.

On Monday, a report in The Economic Times said besides SpiceJet, two other companies, Sharjah-based aviation company Sky One, Africa-focused Safrik Investments, have expressed interest in taking over Go First.