Go First acquisition – SpiceJet said on Tuesday that it has expressed interest in acquiring Go First and plans to submit an offer after conducting due diligence on the bankrupt carrier. The cash-strapped airline stated in a regulatory filing that the acquisition proposal was submitted with the intention of creating 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,” according to a statement issued by SpiceJet to bourses.
Go First ceased operations on May 3 due to financial difficulties caused primarily by Pratt & Whitney engine issues. On May 2, it filed an insolvency resolution petition with the National Company Law Tribunal (NCLT).
Go First acquisition
“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,” according to the filing released on Tuesday.
SpiceJet shares hit a 52-week high on the BSE on Tuesday after the company announced its intention to acquire Go First. SpiceJet’s stock rose more than 7% in early trading. SpiceJet shares were up more than 3.6 percent as of 11 a.m.
At 12:20 p.m., the shares were trading at Rs 66.78, up 4%.
Go First informed the Delhi High Court last month that it had exhausted the funds provided by the Committee of Creditors and was dealing with a manpower shortage and financial constraints. The CoC had provided interim funding of Rs 100 crore to the airline for service maintenance costs.
The NCLT has extended the cash-strapped airline’s corporate insolvency resolution process by 90 days, until February 4, 2024.
The NCLT has ordered the troubled airline to submit an action plan within the time frame specified. The tribunal stated that if the airline does not complete the resolution process within 90 days, the company will be liquidated.
According to a report in The Economic Times on Monday, in addition to SpiceJet, two other companies, Sharjah-based aviation company Sky One and Africa-focused Safrik Investments, have expressed interest in acquiring Go First.
Add Comment