Online travel platform EaseMyTrip's co-founder and chief executive officer (CEO) Nishant Pitti, announced the withdrawal of his personal bid from the GoAir acquisition process.
“After careful consideration, I have decided to withdraw from the GoAir bid in my personal capacity. This decision allows me to better focus on other strategic priorities and initiatives that align with our long-term vision and growth objectives. Our commitment to delivering exceptional value and service remains unwavering as we continue to navigate new opportunities and challenges,” he said.
Go First, formerly known as GoAir, had received two bids for its acquisition on February 26. The consortium of SpiceJet's chairman and managing director Ajay Singh and Busy Bee Airways, associated with EaseMyTrip's chief executive officer Nishant Pitti, submitted a joint bid in their personal capacity, while the other bid is from Jaideep Mirchandani-owned Sky One Airways.
Ajay Singh and Busy Bee Airways had jointly submitted a bid of around Rs 1,600 crore for the beleaguered airline.
The withdrawal of the bid comes at a time when the online travel platform EaseMyTrip reported a loss of Rs 15 crore as against a profit of Rs 31 crore during the same period a year ago. This is the first time the company has incurred a loss in at least three years.
The loss was because EaseMyTrip wrote off amounts recoverable from "Go Airlines (India) Limited" as the Holding Company assessed that "the chances of recovery are remote in the pending dispute resolution proceedings of the airline at National Company Law Tribunal, Delhi Bench."
The provision is to the tune of Rs 54 crore net of taxes.
Go First's financial woes and insolvency plea
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.
Back in December 2023, lenders to troubled domestic carrier Go First, founded by billionaire Nusli Wadia, were looking to clear a proposal to liquidate the company, which had failed to meet multiple deadlines to resolve its ongoing debt crisis.
Go First's lenders had voted on a proposal to liquidate the insolvent airline in December.
GoFirst owes Rs 6,521 crore to lenders, including Bank of Baroda, Central Bank of India, Deutsche Bank and IDBI Bank, according to the information provided by the airline. Central Bank of India had the highest exposure of Rs 1,987 crore, followed by Bank of Baroda at Rs 1,430 crore, Deutsche Bank at Rs 1,320 crore and IDBI Bank at Rs 58 crore.
Apart from money owed to banks, the airline owes around Rs 2,000 crore to various aircraft lessors, around Rs 1,000 crore to its vendors, around Rs 600 crore to travel agents, and Rs 500 crore to customers with pending refunds.
Go First has also borrowed Rs 1,292 crore under the Centre’s emergency credit scheme, introduced during the covid crisis. The ultra-low-cost airline’s total liabilities amount to around Rs 11,000 crore, including its obligation to lessors.
The Wadia Group airline stopped flying on May 2, 2023, and the National Company Law Tribunal (NCLT) had admitted its plea for voluntary insolvency eight days later.
Go First had around 7,000 employees at the time it declared voluntary bankruptcy on May 2. The Wadia Group-owned airline halted operations and applied for insolvency resolution citing a financial crunch due to the absence of engines and spares, which had grounded half of its fleet.
GoAir had 56 leased aircraft when it suspended operations. Lessors of both engines and aircraft are fighting to take them back.
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