SpiceJet shares climb 13% as Ajay Singh submits bid to acquire bankrupt airline GoFirst

Shares of SpiceJet Ltd zoomed 13% in the afternoon session today after the airline said it along with Busy Bee Airways, have jointly submitted a bid for acquiring bankrupt airline GoFirst. Shares of SpiceJet rose 13% to Rs 71.90 on BSE. Market cap of the airline rose to Rs 4,858 crore.  

The bid has been submitted by Ajay Singh, Chairman and Managing Director of SpiceJet, in his personal capacity, along with Busy Bee Airways Private Limited, SpiceJet said.

Total 248.61 lakh shares of the firm changed hands amounting to a turnover of Rs 174.02 crore on BSE. Later, the SpiceJet stock ended 11.28% higher at Rs 70.81 on BSE.  

"SpiceJet's role as the operating partner for the new airline involves providing essential staff, services, and industry expertise. This collaboration is anticipated to generate synergies between the two carriers, leading to improved cost management, revenue growth, and a strengthened market position within the Indian aviation industry," said SpiceJet. 

In May 2023, GoFirst filed for insolvency. The airline said it could no longer continue to meet its financial obligations and blamed US-based engine maker Pratt & Whitney's (P&W) faulty engines for grounding 50 per cent of its fleet. 

The airline was grappling with cash crunch since almost half of its fleet was grounded. That time, GoFirst owed five banks a total of over Rs 6,500 crore. Those banks were Central Bank of India, Bank of Baroda, IDBI Bank, Axis Bank and Deutsche Bank. The company also deferred its IPO many times before ultimately filing for insolvency. 

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