Go First sale: Sky One offers more money ahead of the bid review on Friday
CNBC-TV18 had earlier reported that with Corporate Insolvency Resolution Process (CIRP) costs estimated at ₹600 crore, financial creditors were concerned that the upfront money offered by the bidders (₹410 crore by one bidder and ₹290 crore by the other) don't leave anything on the table for the lenders. That has changed now.
CNBC-TV18 has learnt that Sharjah-based aviation solution provider Sky One has offered more money upfront in its bid to acquire the now insolvent airline, GoFirst.
The move has come before a likely meeting on Friday (March 22) when the lenders will review the bids on the table, according to a source.
According to a person in the know, Sky One is now offering lenders ₹750 crore, compared to ₹410 crore earlier. The bidder has also already offered to pay lenders 25% of the amount received from the settlement in the Pratt and Whitney case.
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CNBC-TV18 previously reported that GoFirst has received two bids for the airline: one from a consortium led by SpiceJet chief Ajay Singh and Nishant Pitti from Busy Bee Airways and the second from Sharjah-based Sky One.
According to sources, the other bidders, the Singh-Pitti consortium, have not revised their offer for GoFirst. They had offered to pay the lenders ₹290 crore upfront.
While this is less than the ₹750 crore offered by Sky One, the Singh-Pitti consortium has promised to pay the entire amount — compared to the 25% offered by the competing bidder, Sky One — received from the arbitration against engine maker Pratt and Whitney, a person directly in the know told CNBC-TV18.
| Bidder | Upfront offer | Later |
| Sky One | ₹750 crore | 25% of the settlement with Pratt and Whitney |
| Singh-Pitti consortium | ₹290 crore | Entire settlement received from Pratt and Whitney |
CNBC-TV18 had earlier reported that with Corporate Insolvency Resolution Process (CIRP) costs estimated at ₹600 crore, financial creditors were concerned that the upfront money offered by the bidders (₹410 crore and ₹290 crore) don't leave anything on the table for the lenders.
However, the revised offer from Sky One to pay ₹750 crore upfront may ease some of that concern.
| Lender | Claims on GoFirst |
| Central Bank of India | ₹1934.4 crore |
| Bank of Baroda | ₹1744.5 crore |
| IDBI Bank | ₹74.4 crore |
| Total | ₹3753.3 crore |
Along with the review of the bids on Friday, the lenders will also determine whether the plans submitted comply with the rules and regulations under the Insolvency and Bankruptcy Code.
“Unless plans are compliant, they cannot be put to vote. Once compliance is ensured, negotiations will continue with both the bidders,” said this person.
How much is GoFirst expected to get from Pratt and Whitney settlement?
Neither of the suitors has indicated how much they expect to recover from Pratt & Whitney or when the settlement is expected.
However, according to one of the sources quoted above, the bidders expect over a billion dollars in settlement from Pratt and Whitney.
In May 2023, when GoFirst filed for bankruptcy, its then-CEO Kaushik Khona said that the airline expected $1.1 billion (about ₹9,100 crore at current exchange rate) in compensation from the US-based engine maker.
GoFirst had sued Pratt and Whitney in an international court for faulty engines, which led to 25 of the airline's fleet getting grounded in May 2023.
(Edited by : Sriram Iyer)
First Published: Mar 20, 2024 2:41 PM IST
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