SpiceJet Eyes Go First To Create Viable Airline

SpiceJet Ltd. confirmed on Tuesday its interest in Go First, saying it aims to create a strong and viable airline with the beleaguered low-cost carrier.

"SpiceJet has expressed interest with the Resolution Professional of Go First and wish to submit an offer post diligence," an exchange filing said.

Go First received fresh interest from bidders, right before it was going into liquidation, NDTV Profit had reported on Monday, citing two people in the know.

Ajay Singh-promoted SpiceJet recently approved and initiated the process of raising fresh capital of about $270 million to strengthen its financial position. This fundraise is also intended to "provide resources to invest in growth plans", it said.

Insolvency proceedings were initiated against Go First earlier this year. The airline had said it is unable to fulfill its financial obligations as more than half of its fleet is grounded due to lack of supply of engines from Pratt & Whitney.

Africa-based Safrik and Sharjah-headquartered aviation firm Sky One have also submitted a joint expression of interest for Go First under the insolvency proceedings, the people in the know had said on the condition of anonymity as details are not public.

SpiceJet is under financial stress and has deferred payments to lessors and other vendors.

On the BSE, shares of SpiceJet jumped as much as 7.77% during the day to Rs 69.20 apiece, the highest since December 2021. The stock was trading 4.03% higher at Rs 66.80 apiece compared with a 0.07% decline in the benchmark Sensex at 10:54 a.m.

The trading volume was 5.1 times its 30-day average. The relative strength index stood at 76, implying it may be overbought.

Out of the four analysts tracking the company, one has a 'buy' rating on the stock, while three recommend 'hold', according to Bloomberg data. The average of 12-month analyst price targets implies a potential downside of 30.8%.