Debt-strapped SpiceJet has officially announced its interest in acquiring the bankrupt airline Go First. The revelation came through a filing where SpiceJet expressed its intent to submit an offer post diligence, with the aim of fostering a robust and viable airline, potentially combining forces with SpiceJet.
“Please note that SpiceJet Ltd…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,” SpiceJet said in the filing.
Sources close to the matter reveal that lenders of Go First are carefully evaluating the possibility of accommodating SpiceJet’s interest, marking a pivotal development in the ongoing bankruptcy proceedings. Go First, grounded since May due to financial turmoil exacerbated by Pratt & Whitney engine issues, possesses a fleet of 54 Airbus SE A320neos.
- Also Read: SpiceJet loss reduces to ₹449 crore in Q2
SpiceJet has requested an extension from the resolution professional for submitting an offer. The initial deadline lapsed without receiving any financial bids. The airline’s proactive approach aligns with its recent announcement of raising fresh capital amounting to ₹2,250 crore. The capital infusion will come through the issuance of equity shares to financial institutions, foreign institutional investors (FIIs), high net worth individuals (HNIs), and private investors. The move is aimed at fortifying SpiceJet’s financial strength and accelerating its growth trajectory.
This development follows a failed attempt by Jindal Power to acquire Go First, leaving the field open for SpiceJet’s potential acquisition. Additionally, other contenders have reportedly expressed interest in acquiring Go First, including Sharjah-based aviation firm Sky One and Africa-focused Safrik Investments.
While SpiceJet charts a course for expansion, Go First’s lenders are exploring options to recover up to ₹12,000 crore tied up in various lawsuits. This includes an arbitration award obtained against engine-maker Pratt & Whitney at the Singapore International Arbitration Centre earlier this year, along with several ongoing legal battles.
Fund raise
Meanwhile, SpiceJet has said that it will hold its AGM on January 10. Among ordrinary businesses, the airline has said it will seek voting on a special business of allotment of warrants with an option to apply for and be allotted equivalent number of equity shares on preferential basis.
It has sought shareholder approval to issue equity shares and share warrants amounting over ₹2,240 crore to financial institutions and HNIs, among others.
Funds will be raised in two tranches and will be used for paying statutory dues, creditor settlement, reviving grounded planes and towards salaries and aviation fuel costs.
Post share issuance, promoter Ajay Singh’s stake in the airline will reduce from the existing 56.49 per cent to 38.55 per cent upon issue of equity shares. It will further reduce to 34.13 per cent upon conversion of warrants.