Go First, a bankrupt carrier going through the corporate insolvency resolution process (CIRP), has received two bids: one from SpiceJet’s chairman and managing director Ajay Singh and a little-known entity called Busy Bee Airways, and another from Sky One, an aviation company based in the United Arab Emirates.
Singh filed the offer with Busy Bee Airways in his capacity, and if the bid is successful, SpiceJet will serve as an operating partner, providing critical people, services, and industry experience. According to Registrar of Companies documents, Busy Bee Airways is a Delhi-based company founded in 2017. According to the documents, the business now has two directors, both of whom were named on December 25, roughly a week after SpiceJet indicated interest in bidding for Go First.
Sky One, a Sharjah-based aviation firm that specializes in a variety of aviation services such as cargo charters, asset trading, pilot training, and maintenance, repair, and overhaul (MRO), has filed the second offer.
Two Bids for Go First
The two proposals have been presented to the resolution professional (RP) for review by the committee of creditors (CoC) as part of the insolvency process. Earlier this week, the National Company Law Tribunal (NCLT) granted Go First a 60-day extension to settle its insolvency issues. The extension was granted when Shailendra Ajmera, the resolution professional (RP) managing Go First’s case, notified the court that the airline had received interest from three possible purchasers, each of whom had already deposited monies.
“I firmly believe that Go First holds immense potential and can be revitalized to work in close synergy with SpiceJet, benefiting both carriers,” Singh said in an official statement. “Apart from coveted slots at domestic and international airports, international traffic rights, and an order for over 100 Airbus Neo planes, Go First is a trusted and valued brand among flyers.”
Sky One’s chairman, Jaideep Mirchandani, said in a statement: “We have submitted our proposal for Go First and look forward to the next stage, due diligence. Given our extensive global aviation knowledge, we are confident about the purchase. Indian aviation is on the verge of historic expansion, and we are delighted to play a role in it.”
SpiceJet Financial Issues
SpiceJet, a low-cost carrier, is dealing with its challenges. SpiceJet suffered significant financial losses as a result of the epidemic. The consolidated net loss increased from ₹302 crores in FY19 to ₹937 crore in FY20, ₹1,030 crore in FY21, ₹1,744 crore in FY22, and ₹1,513 crore in FY23.
The airline is currently in the process of laying off 15% of its personnel, or 1,500 people by March. “SpiceJet is actively working on a revival strategy. The business plans to raise an additional 1,000 crore. SpiceJet already has shareholder permission to finance up to 2,500 crore through qualified institutional placement, avoiding the need for additional approval, according to a statement by the airline.
Go First’s Bankruptcy
Go First filed for bankruptcy protection in May of last year, but lenders have recently considered liquidating the airline after failing to find new investors. Creditors included in the bankruptcy case include the Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank.
Apart from SpiceJet and Sky One, Safrik, an Africa-focused investment business, indicated interest in bidding for Go First in December. It is unclear whether Safrik has placed a bid for Go First. Previously, Jindal Power and Jettwings Airways expressed expressions of interest (EOI) in acquiring Go First, but did not ultimately bid for the Wadia group airline, prompting lenders to consider liquidating Go First.
This is the second time in five years that there has been speculation about reviving a grounded carrier in Indian aviation. Due to financial difficulties, Jet Airways was forced to suspend ground operations in April 2019. In June 2021, the NCLT authorized a resolution plan by the Jalan-Kalrock Consortium (JKC) to invest up to ₹1,375 crore. However, the transfer of ownership is currently waiting due to a legal dispute between JKC and the lenders over the completion of preconditions.
