Go First has been grounded since May 3 (File).
SpiceJet promoter Ajay Singh has submitted a bid - with Busy Bee Airways Pvt Ltd - to acquire the troubled Go First carrier, the airline said Friday. The bid, filed earlier today, is a "significant strategic move (with the) potential to reshape the landscape of the Indian aviation sector", SpiceJet said.
The bid has been submitted by Mr Singh in his personal capacity, the airline said.
Under the terms of the offer, SpiceJet will be the operating partner for the new airline, and will provide staff, services, and industry expertise. The airline will hope to leverage established infrastructure and operational capabilities to achieve significant revenue expansion.
In his statement, Ajay Singh said Go First has "immense potential and can be revitalised to work in close synergy with SpiceJet, benefitting both carriers", and that "by strategically aligning flight schedules and destinations, SpiceJet and the new airline can capture a larger market share..."
In December last year SpiceJet had said an offer for Go First would be submitted pending clearance of due diligence, to "create an airline in collaboration" with the bankrupt carrier.
READ | SpiceJet To Submit Offer To Go First After Due Diligence
That news pushed SpiceJet shares up by over seven per cent, and today's news had a similar effect; at 3.50 PM it was up by more than 11 per cent after touching an intraday high.
This news comes days after SpiceJet said it had begun adopting measures to reduce its workforce, with the aim to lay off 1,400 staff, or 15 per cent of its work force, to save Rs 100 crore annually.
READ | SpiceJet To Lay Off 1,400 Employees, Save $12 Million Annually: Report
The number of layoffs was reported by business publication Economic Times but not confirmed by the airline, which only said it was taking the measures as part of turnaround and cost-cutting efforts.
Once India's second-largest airline, SpiceJet has so far raised Rs 744 crore as part of a refinancing plan that is expected to extend to an infusion of a massive Rs 2,250 crore in fresh capital.
Sky One's Bid
Meanwhile, Sky One, based in Sharjah in the United Arab Emirates, is the second bidder for Go First.
"We have submitted a bid for Go First and look forward to the next stage - due diligence. Given our vast aviation experience across the globe, we are confident about the acquisition. Indian aviation is at the cusp of unprecedented growth and we are glad to play a part," Chairman Jaideep Mirchandani said.
Go First's Financial Troubles
Go First filed for bankruptcy protection in May last year, but lenders have, more recently, been considering liquidating the airline after failing to secure new investors. Its bankruptcy filing lists Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank among creditors.
READ | IndiGo, Go First Forced To Ground Nearly 50 Planes. Here's Why
The airline has been grounded since May 3, when it filed for voluntary bankruptcy before the National Company Law Tribunal, alleging delays by a United States-based engine maker.
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