Almost ten months ago, Go First entered a voluntary insolvency process, due to which the airline was grounded. The premise was to restructure and return to operate flights, but it now seems that isn’t happening anytime soon with the original owners. So, the Committee of Creditors and the Resolution Professionals are now looking for another buyer. So far, no success and the third attempt to look for a winning bid is ongoing.

Enter Nishant Pitti and Ajay Singh’s bid.

As reported last week, Nishant Pitti of EaseMyTrip and Ajay Singh of SpiceJet have joined hands to make a bid for Go First. CNBC TV18 went around doing some digging and found out that the combine has promised to pay INR 600 Crores (USD 7.24 Million) to the Creditors, which is more than the bid amount from the other bidder, Sky One.

However, the more interesting details are in what their own plans are for this airline.

• Sell Land Parcels to realise the amount owed to the Banks: Go First seems to have land worth INR 8,0000 Crores, which, if the bid is approved, might be sold to realise an amount enough to pay off the banks. The land is in Powai and Thane in Mumbai.
• Realise Corporate Guarantees from The Wadia Group: Apart from selling the land, the proposal also envisages that the existing corporate guarantees made by the Wadia Group on behalf of Go First be encashed to recover their dues.
• Get USD 300 Million from Pratt & Whitney: The airline was grounded on the premise that Pratt & Whitney was not supplying replacement engines to the airline, and it caused the airline monetary loss. The team of Singh and Pitti believe that they will be able to realise the USD 300 million from the arbitration award of the airline. And amongst other possibilities of their business plan, they might assign the rights to this money to someone else and take the funds now.
• Sell all sorts of rights: In a clear indication that the duo don’t intend to restart the airline for good, the consortium plans to sell the 72 slots to the new Airbus A320neo that it currently holds to other airlines (I’m not sure if these slots are Airbus property or the airlines) Not just that, the landing slots at airports are also intended to be traded away (although the Government of India can take these slots back and redistribute them to other airlines without Go First being in the picture, like they did at the time of Jet Airways).
• Sell the airline to a Middle-Eastern Carrier: Call these pipe dreams, but the duo would also like to sell the airline to a Middle-Eastern carrier who might want to own it for more market access to India. After all, a 100% Foreign Investment in Indian carriers was allowed when Air India had to be sold.

Amongst all of this, while many things are theoretically possible, they are practically away from reality. I don’t see why the banks need this combine to be around to help sell a land parcel when they could do it themselves or encash a corporate guarantee. In this whole plan, there is no mention of what happens to the refunds to customers.

And given the execution of the plan for Jet Airways, which about five years later has still not taken off the ground, this is a highly optimistic take on the airline’s resurgence. Also, what are the INR 600 crores being paid for? To get keys to the airline and then strip it apart and make money off it? Perhaps.

As per The Morning Context, the whole bid is being bankrolled by Nishant Pitti, and Ajay Singh and SpiceJet are there to lend their name and “operational expertise” in running an airline.

Bottomline

SpiceJet’s Ajay Singh and EaseMyTrip’s Nishant Pitti have come together to bid for Go First. As per initial reports around their plan to resurrect the airline, as reported by CNBC TV18, the airline’s assets will be sold and the money due to the creditors recovered. The due will keep the difference.

What do you make of the plan submitted by Singh and Pitti to buy SpiceJet and resurrect it?

---

Liked our articles and our efforts? Please pay an amount you are comfortable with; an amount you believe is the fair price for the content you have consumed. Please enter an amount in the box below and click on the button to pay; you can use Netbanking, Debit/Credit Cards, UPI, QR codes, or any Wallet to pay. Every contribution helps cover the cost of the content generated for your benefit.

(Important: to receive confirmation and details of your transaction, please enter a valid email address in the pop-up form that will appear after you click the ‘Pay Now’ button. For international transactions, use Paypal to process the transaction.)

We are not putting our articles behind any paywall where you are asked to pay before you read an article. We are asking you to pay after you have read the article if you are satisfied with the quality and our efforts.