Spice Jet Share Rally As The Airline Plans To Submit EOI For Cash Strapped Go First
Spice Jet Share hit a 52-week high on Tuesday, as the company confirmed that it wished to submit an expression of interest (EoI) along with a viable revival plan for the cash-strapped Go First airline. With this, the company”s share reached Rs. 69.20, a 52-week high in the early trade, before closing at Rs. 65.8.
The stock zoomed 2.13% on Tuesday. In an exchange filing on Tuesday, SpiceJet said, “SpiceJet Limited (the “Company” or “SpiceJet”) has expressed interest in the Resolution Professional of Go First and wishes to submit an offer post diligence, with a view to creating a strong and viable airline in a possible combination with SpiceJet.”
The company also revealed that it has raised a capital of about $270 million to strengthen its financial position and provide resources to invest in growth plans. As the company missed the deadline for submitting the Expression of Interest (EOI), it requested Ernst & Yonung LLP”s Shailendra Ajmera, who is the resolution professional of Go Airline (India) Ltd., to allow them to file the EOI along with a credible revival plan within a definite timeline.
Spice Jet shares have been rallying since Monday, as the report stated that the company, along with two others—Sky One Company and Safrik Investments—will acquire Go First. SpiceJet shares were locked in the upper circuit for Rs. 64.29 on December 18, 2023. However, analysts have muted coverage on the shares, with two of them having a “hold” call.
Go First, owned by the Wadia group, had applied for voluntary insolvency before the National Company Law Tribunal (NCLT) in May. The company grounded its fleet in the same month, citing faulty engines, and filed for bankruptcy, blaming US-based engine manufacturer Pratt & Whitney (P&W) for its dire situation.
The cash-strapped airline acknowledged that it decided to file for bankruptcy following “the ever-increasing number of failing engines supplied by Pratt & Whitney”s (P&W) International Aero Engines.”
