In a surprising turn, Sky One, Safrik Investments, and SpiceJet seek a deadline extension, expressing interest in acquiring bankrupt carrier Go First
In an unexpected turn of events, three entities—Sharjah-based aviation company Sky One, Africa-focused Safrik Investments, and local airline SpiceJet—have signaled their interest in acquiring the bankrupt carrier Go First. This comes as a surprise since the deadline for submitting proposals has already passed, and lenders were contemplating liquidation.
In the last 10 days, Shailendra Ajmera, the resolution professional overseeing the corporate insolvency resolution process (CIRP) for Go First, has received requests from these entities to conduct due diligence on the inactive airline, as per a report by the Economic Times. They also mentioned that all three entities have requested an extension of the deadline.
The lenders have been considering the liquidation of the airline since no bids were received by the deadline of November 22.
The expectations of a more favorable recovery from the ongoing arbitration proceedings in Singapore against Pratt & Whitney (P&W) is shared by both lenders and the RP, compared to the potential outcome of selling the airline. The ongoing arbitration, initiated by Go First's previous management, is being pursued by the lenders. They are seeking over $1 billion from P&W, alleging that the engine maker supplied faulty engines, which were not replaced promptly, causing the grounding of half the airline's fleet and ultimately leading to its bankruptcy.
As per sources cited by the report, Go First exclusively utilized P&W engines, unlike its rivals who employed a combination of P&W and CFM engines. This choice adversely affected and led to the grounding of 50 per cent of Go First's aircraft. The source emphasized that P&W is obligated both legally and morally to comply with arbitration laws in this regard.
Moreover, SpiceJet, despite being a robust local contender in the aviation sector, faces skepticism from bankers due to its own survival challenges, as evidenced by its recent board approval to raise over Rs 2,250 crore through a share issue.