Go First lenders yet to decide on bids

by margretcaron

Synopsis

Both bidders had increased their bids earlier this month after initial scrutiny by lenders, necessitating an extension to complete negotiations, people familiar with the process said. “The committee of creditors (CoC) will meet either this week or early next week to finalise the extension of the timeline since a few more days will be needed to scrutinise and finally decide on the bids that are currently on the table,” said a person aware of the process.

‘Go First Lenders Yet to Decide on Bids, Airline’s Revival Likely to be Delayed’

A revival of Go First Airlines is set to get prolonged with creditors to the bankrupt airline likely to seek a third extension to the resolution timeline beyond the April 4 deadline even as formal negotiations with two final bidders are yet to commence.

Both bidders had increased their bids earlier this month after initial scrutiny by lenders, necessitating an extension to complete negotiations, people familiar with the process said.

“The committee of creditors (CoC) will meet either this week or early next week to finalise the extension of the timeline since a few more days will be needed to scrutinise and finally decide on the bids that are currently on the table,” said a person aware of the process.

To be sure, a fresh extension will take the timeline beyond the outer deadline of the bankruptcy code of 330 days, but lenders say more time is needed to complete the process.

Sharjah-based aviation company Sky One helmed by Jaideep Mirchandani, and domestic airline SpiceJet promoter Ajay Singh along with an entity called Busy Bee Airways, which is owned by Nishant Pitti- owner of online travel portal EaseMyTrip, are the two bidders in the fray.

Resolution professional Shailendra Ajmera and lead lender Central Bank of India did not respond to emails seeking comment.

Both bidders have included future arbitration claims from Go First’s proceedings against engine maker Pratt & Whitney (P&W) in their respective resolution plans. “Sky has offered Rs 735 crore upfront in cash and up to 20% of arbitration claims in the future while Ajay Singh has offered to pay Rs 650 crore over 12 months and 10% of arbitration claims,” said a second person cited above.

Both bidders had increased their cash component earlier this month after initial talks with lenders. The Ajay Singh-led consortium had earlier proposed to pay Rs 290 crore in cash while Sky One had initially offered Rs 410 crore upfront to lenders, according to media reports.

“Lenders will prefer a higher proportion of upfront cash and mostly paid immediately than an elongated payment schedule. There is uncertainty over how the arbitration proceedings will go which is a big part of both the bids. Also, the company has a land parcel which has been kept as collateral with banks whose value has also been appropriated by bidders. All these issues will have to be clarified if the process has to go forward,” said the first person cited above.

The land parcel in Thane near Mumbai could be worth at least Rs 1,000 crore with the valuation inching close to Rs 3,000 crore if its potential development potential is considered. Lenders are wary of bidders appropriating this land value in their bids because it is kept as collateral with banks.

Go First owes creditors more than Rs 6,200 crore. Central Bank of India, Bank of Baroda and IDBI Bank are the secured creditors with Rs 1,934 crore, Rs 1,744 crore and Rs 75 crore of admitted claims, respectively.

This is the second attempt by lenders after a disappointing first round last October when Jindal Steel and Power promoter Naveen Jindal’s expression of interest (EoI), the only preliminary inquiry to make the cut as a bidder for the airline, did not translate into a final bid.

The Wadia Group-owned airline, which operated under the Go First brand, had filed for voluntary insolvency proceedings on May 3, 2023, before the Mumbai bench of the National Company Law Tribunal. It blamed its financial crisis on protracted delays in sourcing airworthy engines from US engine maker Pratt & Whitney (PW), resulting in the grounding of half of its fleet.

( Originally published on Mar 27, 2024 )

Read More News on

You may also like

Leave a Comment

multipurpose site for ROV ,drone services,mineral ores,ingots,agro commodities-oils,pulses,fatty acid distillate,rice,tomato concentrate,animal waste -gallstones,maggot feed ,general purpose niche -consumer goods,consumer electronics and all .Compedium of news around the world,businesses,ecommerce ,mineral,machines promotion and affiliation and just name it ...
multipurpose site for ROV ,drone services,mineral ores,ingots,agro commodities-oils,pulses,fatty acid distillate,rice,tomato concentrate,animal waste -gallstones,maggot feed ,general purpose niche -consumer goods,consumer electronics and all .Compedium of news around the world,businesses,ecommerce ,mineral,machines promotion and affiliation and just name it ...

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Privacy & Cookies Policy