Go First bidders propose conditional payments

The upfront payment in the proposals is reportedly insufficient to cover the costs of insolvency resolution.

The outlook for Go First is uncertain as both prospective buyers have submitted proposals with payments linked to the resolution of a lawsuit against engine manufacturer Pratt & Whitney. Also, according to information sourced by CNBC-TV18, the upfront payment in the proposals is reportedly insufficient to cover the costs of insolvency resolution.

Two bids have been submitted for Go First - one from a consortium led by SpiceJet chief Ajay Singh and Nishant Pitti from Busy Bee Airways, and the second from Sharjah-based Sky One. Ajay Singh and Busy Bee Airways have jointly submitted a bid of 16 billion rupees ($193.10 million) for the airline, bankers said.

As per sources, both the Ajay Singh-Nishant Pitti consortium and Sky One, the potential buyers, have not proposed a substantial initial payment to address the Corporate Insolvency Resolution Process (CIRP) expenses of the airline. These estimated costs, around Rs 600 crore, according to sources, hold precedence under India's Insolvency and Bankruptcy Code (IBC) waterfall mechanism for dues recovery.

The channel further reported that the Ajay Singh-Nishant Pitti consortium proposed Rs 290 crore upfront and committed to fully repay financial creditors from Pratt & Whitney arbitration proceeds. Sky One offered Rs 410 crore upfront to lenders and 25 percent of arbitration proceeds to creditors.

Go First filed for voluntary insolvency citing PW engine woes

Go First, promoted by the Wadias, filed for voluntary insolvency before the National Company Law Tribunal (NCLT) in May last year. The crisis-hit airline attributed its decision to engine supplier Pratt & Whitney (PW), alleging that the increasing incidents of failures of engines supplied by the US-based firm’s International Aero Engines forced its hand.

Go First ceased operations on May 3, 2023.

The consortium led by Singh and Pitti collectively presented on February 16 a bid for the acquisition of Go First Airlines.

The National Company Law Tribunal (NCLT) in Delhi on February 13 approved the resolution professional's (RP) request for a 60-day extension to conclude the corporate insolvency resolution process (CIRP) of Go First.