India’s SpiceJet shows interest in buying bankrupt Go First, shares jump

By Manvi Pant and Hritam Mukherjee

BENGALURU (Reuters) -India’s SpiceJet is considering an offer for bankrupt carrier Go First, the cash-strapped airline said on Tuesday, days after it barely raised enough funds to get its grounded planes back in the sky.

SpiceJet said it would make the offer – the details of which were not disclosed – after conducting due diligence on Go First’s resolution professional, the official involved in conducting the airline’s insolvency process.

Shares of the carrier rose about 7% to hit more than a year high.

The news comes weeks after Go First’s lenders began contemplating the airline’s liquidation as they failed to get any bids before the deadline of Nov. 21.

“The bid that has come from SpiceJet is surprising,” Prabhudas Lilladher analyst Jinesh Joshi said.

“(SpiceJet) is venturing to revive a grounded airline at a time when it itself is battling a host of issues, including a funding crunch,” he said.

SpiceJet announced plans last week to raise 22.50 billion rupees (nearly $271 million) – an amount that analysts believe just about covers its total expense of 21.8 billion rupees for the July-September quarter.

On Monday, the Economic Times reported that Sharjah-based Sky One, Africa-focused Safrik Investments and SpiceJet had all shown interest in Go First and were in talks with the airline’s creditors for an extension of deadline.

Go First, which filed for bankruptcy in May, did not immediately respond to a Reuters request for comment.

Go First has Central Bank of India, Bank of Baroda, IDBI Bank and Deutsche Bank among its creditors, to whom it owes a total of 65.21 billion rupees.

($1 = 83.1760 Indian rupees)

(Reporting by Manvi Pant and Hritam Mukherjee in Bengaluru; Editing by Janane Venkatraman and Anil D’Silva)