Low-cost airline SpiceJet completes Rs 744 crore refinancing plan with the allotment of equity shares and warrants on a preferential basis. The airline seeks additional time from regulators to complete the remaining funding tranche due to limited banking days during long weekends.
SpiceJet promoter Ajay Singh, Sky One, and Busy Bee have submitted the bank guarantee and expression of interest for bankrupt Go First Airlines. The lenders may extend the resolution process deadline by two months. Singh applied individually, while Busy Bee is a new applicant associated with Plan IT. Safrik Investments and NS Aviation did not submit guarantees. The three entities will receive more information on Go First to develop a formal plan. Creditors may vote again to extend the resolution timeline beyond the current deadline.
Creditors of bankrupt Go First Airlines allow fresh proposals from prospective resolution applicants (RAs). Five entities, including SpiceJet, express interest. RAs must submit bank guarantee and formal EoI. CIRP may be extended. Lenders skeptical of strong bids due to airline's struggles. Court battle with lessors. Lenders pursue arbitration against Pratt & Whitney.
"Among the creditors, a large public sector bank which is a key creditor wants more time since the approval to extend the process needs to be ratified by its board. So voting lines are still open for everyone, though some of the creditors have already voted," said a person aware of the process.
Shailendra Ajmera, the resolution professional (RP) managing Go First's corporate insolvency resolution process (CIRP), received requests from these entities- Sharjah-based aviation company Sky One, Africa-focused Safrik Investments and local airline SpiceJet- for conducting due diligence of the grounded airline during the past 10 days, people familiar with the matter said.
Investment will help the airline to induct fresh capacity and reduce liabilities, thereby reducing cost of capital, said SpiceJet promoter Ajay Singh.
On July 31, the HC had upheld the arbitral award that had asked SpiceJet and Singh to pay Rs 579 crore with interest to Maran in a seven-year-old share transfer dispute.. The appeal against this is pending before a division bench of the HC.
Six airlines, including SpiceJet and Air India from India, have successfully completed the risk-based approach audit by the International Air Transport Association (IATA), the world's largest trade group of global airlines. The other airlines that completed this audit are American Airlines, British Airways, LATAM, Luxair, and Qatar Airways.
The senior counsel for WLFC argued that the company was within its rights to file an insolvency petition Spicejet under Section 9 of the Insolvency and Bankruptcy Code, 2016. The counsel referred to the mail correspondence between WLFC and Spicejet to establish that the servicer was handling debt negotiations in this case. The counsel also referring to the service agreement showed that the agreement allowed it on behalf of the operational creditors to collect dues.
Increased demand and the absence of COVID-19 restrictions have caused prices for hotels, flights, and holiday packages to rise during the upcoming festive season in India. The bankruptcy of budget airline Go First has also led to a shortage of aircraft, further inflating air fares. Hoteliers have been compelled to increase room tariffs to take advantage of high demand.
SpiceJet has made a payment of $1.5 million to Credit Suisse after the Supreme Court of India ordered the chairman of the budget carrier, Ajay Singh, to pay the amount or face imprisonment. The court had previously asked Singh to make a payment of $500,000 by September 22nd, along with $1 million towards the defaulted amount.
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