SpiceJet, facing financial difficulties, has declared its intention to acquire the bankrupt airline Go First. SpiceJet recently filed an intent to submit an offer, aiming to create a strong and viable airline by potentially joining forces.
SpiceJet stated in the filing that they want to submit an offer to Go First and create a strong airline partnership. According to insiders, Go First's lenders are considering SpiceJet's interest, which could be a significant development in the bankruptcy proceedings. Go First, which has been unable to operate flights since May due to financial difficulties worsened by problems with Pratt & Whitney engines, owns a collection of 54 Airbus SE A320neos.
An extension has been sought by SpiceJet from the resolution professional to meet the offer deadline. The original deadline passed without receiving any financial proposals. The airline's proactive measures are in accordance with its recent announcement of obtaining additional funding of ₹2,250 crore. Equity shares will be issued to financial institutions, FIIs, HNIs, and private investors to bring in the capital infusion. This step is taken to reinforce SpiceJet's financial power and expedite its progress. Jindal Power's failed acquisition of Go First has paved the way for SpiceJet to potentially acquire the company. Furthermore, Sky One and Safrik Investments are among the other contenders interested in acquiring Go First.
Go First's lenders explore options to recover ₹12,000 crore entangled in lawsuits as SpiceJet expands. This involves various legal battles, including an arbitration award that was obtained earlier this year against Pratt & Whitney, the engine manufacturer, at the Singapore International Arbitration Centre. Spice Jet has confirmed that its AGM will be held on January 10. Among regular businesses, the airline has announced its intention to seek voting on a special matter related to allotting warrants and offering the option to apply for equity shares on a preferential basis. Equity shares and share warrants totaling over ₹2,240 crore are being proposed to be issued to financial institutions and HNIs, among others, pending shareholder approval.
The funds will be raised in two installments and allocated towards settling statutory dues, resolving outstanding debts with creditors, restoring grounded planes, and covering salaries and aviation fuel costs.
Following the issuance of shares, the stake of promoter Ajay Singh in the airline will decrease from the current 56.49 percent to 38.55 percent after the equity shares are issued. The percentage will decrease even more to 34.13% when the warrants are converted.