India: SpiceJet and Busy Bee Airways submit joint bid for Go First

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2 years ago

Indian budget carrier SpiceJet said on Friday its managing director, Ajay Singh, and Busy Bee Airways had submitted a joint bid for Go First airlines.

SpiceJet, which is cutting costs and raising funds to tide over its financial troubles, did not disclose any financial details for Singh’s bid that the airline’s largest shareholder made in his personal capacity.

Go First, which filed for bankruptcy in May last year, had received expressions of interest from Singh, Busy Bee and Sky One Airways by the Jan. 31 deadline.

Sky One has also submitted a bid for Go First, the airline’s chairman told news channel CNBC-TV18.

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SpiceJet, which had previously shown interest in buying Go First itself, said it would provide staff and services for the new airline.

Being an operating partner for Go First would likely help expand cash-starved SpiceJet’s revenues, said Jinesh Joshi, a research analyst at Prabhudas Lilladher.

However, Joshi said it would be worth observing how Singh would devote his time between the two airlines should his bid succeed “given one airline would be owned in his personal capacity.”

SpiceJet, once India’s second-largest airline, has raised funds from investors, including Singh, and a government credit line over the past year to repay lessor dues and revive its grounded fleet. It even cut jobs earlier this week to save $12 million annually.

That has helped its stock price surge nearly three-fold since hitting an over seven-year-low last May, around when Go First filed for bankruptcy.

With information from Reuters