Revised Bids Submitted for Insolvent Go First as Decision Looms

Contenders for the acquisition of the bankrupt airline Go First have updated their proposals in anticipation of a crucial meeting set for March 22, where the airline’s administrator and lenders will evaluate the adjusted bids. This meeting is pivotal in determining the future course for Go First, which halted operations in May 2023 amid financial distress.

The partnership between Ajay Singh, SpiceJet’s managing director, and Nishant Pitti, CEO of EaseMyTrip, initially offered INR16 billion (USD192 million), including an upfront payment of INR2.9 billion (USD34.8 million). Meanwhile, Sky One, based in Sharjah, although not revealing the total bid value, had proposed an upfront payment of INR4.1 billion (USD49.2 million).

Given that neither initial upfront payment suffices to cover the approximate INR6 billion (USD72 million) insolvency administration costs, further negotiations were anticipated. The substantial claims from creditors, totaling INR65.21 billion (USD783 million), underline the financial challenges facing Go First.

A significant aspect of both acquisition proposals is the anticipated USD1 billion damages payment from Pratt & Whitney, related to an ongoing engine issue lawsuit. The resolution of this lawsuit is a critical factor, with Sky One suggesting allocating 25% of these proceeds to settle Go First’s debts, whereas the Singh-Pitti bid has promised to redirect 100% of the lawsuit proceeds to creditors. However, the timeline for these potential funds remains uncertain.

Following recent discussions, CNBC India reported that Sky One has increased its upfront offer to INR7.5 billion (USD90 million), maintaining its initial stance on the lawsuit proceeds. Conversely, the Singh-Pitti consortium has reportedly boosted their total bid to INR17-17.5 billion (USD204-210 million), without altering the upfront cash component.

As the decision-making process advances, the administrator and lenders must not only assess the financial aspects of these bids but also ensure compliance with India’s Insolvency and Bankruptcy Code. The upcoming meeting on March 22 will be a decisive moment for Go First, as stakeholders seek a viable path forward for the troubled airline.