The bid value of SpiceJet’s chairman and managing director, Ajay Singh and the majority shareholder of partner firm, Busy Bee Airways’, Nishant Pitti, for the bankrupt carrier, Go First is Rs 600 crore.
The duo plan to pay off the dues of the banks by monetising two land parcel Go First has in Mumbai. Go First owes banks around Rs 6,521 crore, of which Rs 1,300 has been drawn under the government’s emergency credit line guarantee scheme (ECLGS). The total dues of the carrier after adding up the claims of vendors and lessors goes up to around Rs 11,463 crore.
Sources said that Singh and Pitti are confident that the valuation of the land parcel will cover part of the dues. The land belongs to the Wadia group, the owners of Go First before it filed for bankruptcy, and was given as corporate guarantee against loans raised.
Further, last year Go First had won an arbitration award of $300 million against engine supplier, Pratt & Whitney at the Singapore International Arbitration Centre, but has been unable to pursue it due to lack of funds. Singh and Pitti plan to pursue it and if the same is realised can be used to settle dues and revive the airline.
As reported earlier, both Singh and Pitti (he’s co-founder of EaseMyTrip) have bid in their personal capacity.
The duo have structured their bid in a way where Pitti holds the majority stake of 60% with the balance being held by Singh. SpiceJet will function as the operating partner for Go First, as per their plan, which involves providing essential staff, services, and industry expertise.
Pitti and Singh declined to speak anything further than the statement issued on February 16.
The other bidder in the fray is Sharjah-based Sky One FZE, which specialises in various aviation services, including cargo charters.
Sources said that if the committee of creditors approve Singh and Pitti’s bid, they plan to restart Go First with a minimum of 15 aircraft, for which they are in talks with the lessors. Before it was grounded, Go First had a total fleet strength of 54, of which 28 were grounded due to engine issues with Pratt & Whitney, and 26 were operational. Several lessors have filed petitions in the court to repossess their aircraft, so the the duo will need to engage with the lessors for retaining them.
“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. I am happy to contribute to the efforts, aimed at reviving this popular airline and leveraging its strengths for mutual growth and success,” Singh had said in a statement on February 16.
On his part, Pitti had said that he has supported a joint bid to resurrect the airline in the interest of the employees and all its stakeholders. “EaseMyTrip, which has no relation to this bid, continues to power on with its own focused and well-articulated expansion strategy,” he had said on February 16.
As per sources, once the carrier stabilises, Pitti might look at cashing out of the venture.
Go First stopped flying on May 3, 2023, and its plea for voluntary insolvency resolution proceedings was admitted by the National Company Law Tribunal (NCLT) on May 10 last year.
On February 13, the NCLT extended the deadline for another 60 days to complete the insolvency resolution process of Go First.