SpiceJet promoter Ajay Singh and Busy Bee Airways have jointly bid for the cash-strapped GoFirst, with the commitment of Go First, which intends to run the airline with the help of SpiceJet, which Singh confirmed and wants to use. The NCLT extended Go First’s resolution process by 60 days. SpiceJet has raised an additional Rs 744 crore through staff cuts as part of its restructuring.
Ajay Singh, promoter of SpiceJet, acting in his individual capacity, has jointly put up a proposal with Busy B Airways Pvt. Ltd. for cash-strapped GoFirst. In a press release, SpiceJet said it will act as a business partner for the new airline, contributing personnel, infrastructure, and industry expertise.
Singh, CMD of the low-cost carrier, said, “I firmly believe that Go First holds great potential and can be revitalized to further synergize with SpiceJet, which will benefit both companies.”
“GoFirst is a respected and trusted brand among travelers, with coveted slots at domestic and international airports, international travel rights and orders for more than 100 Airbus Neo aircraft.” I am pleased that this supports targeted efforts to revive the popular airline and reap the benefits and benefits of shared prosperity and expansion,” declared Singh.
SpiceJet believes that acting as the bankrupt airline’s service provider will present considerable prospects for revenue increases.
As of 3:20 pm, SpiceJet’s share price was approximately Rs 70.6, up over 11%, compared to a 0.5% increase in benchmark indices.
Go First story
Go First shut down on May 3rd, claiming financial difficulties. On May 10, Go First’s request to start voluntary insolvency resolution proceedings was granted by the National Company Law Tribunal (NCLT).
In addition to Singh, Go First has attracted attention from Safrik Investments, a firm focused on Africa, and Sky One, based in Sharjah.
The Go First resolution procedure has been extended by the NCLT for a period of sixty days. A two-member panel of the NCLT granted the resolution professional in charge of Go First’s request to extend the deadline for wrapping up the corporate insolvency resolution procedure (CIRP).
This is the second extension granted by the NCLT; the first one, which lasted 90 days and expired on February 4, was approved on November 23 of last year.
Go First filed for bankruptcy, claiming that the company owes a total of Rs 6,521 crore to its creditors, which include the Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank.
SpiceJet’s financial outlook
Aiming to simplify its financial status, SpiceJet recently let go of about 15% of its employees. Employee wages at SpiceJet were reportedly delayed, according to ET.
“As part of our turnaround and cost-cutting strategy, following the recent fund infusion, SpiceJet has initiated several measures, including manpower rationalization, aimed at achieving profitable growth and positioning ourselves to capitalize on the opportunities in the Indian aviation industry,” said a spokesperson, according to the Economic Times
Since starting operations in 2005, SpiceJet has employed about 9,000 people and is now running a fleet of 30 aircraft, 10 of which are leased. Prior to the start of the Covid-19 epidemic in 2019, SpiceJet claimed to have over 15,000 employees and a fleet of 118 aircraft.
About two weeks ago, SpiceJet effectively completed the first round of capital infusion, obtaining Rs 744 crore by preferentially allocating securities. The airline is reportedly preparing to issue shares and warrants as part of a bigger fundraising campaign aimed at generating Rs 2,250 crore.
Currently, SpiceJet serves 48 local and international destinations with about 250 flights every day. The airline possesses a diverse fleet of aircraft, comprising the Boeing 737 Max, Boeing 700, and Q400 models.
