India's Go First to seek $72.5mn in emergency gov't loan

CEO of India's SpiceJet in talks to raise $100mn - report

The CEO of SpiceJet (SG, Delhi International) is in talks to raise up to USD100 million, according to India's MoneyControl outlet. Sources close to the negotiations claimed that Ajay Singh is in the early stages of talks with several global funds and is nutting out the pricing terms for a possible structured credit transaction.

Despite the widely reported problems SpiceJet and Singh face, including multiple active lawsuits and insolvency petitions, the low-cost carrier reported a net profit of INR2.0456 billion rupees (USD24.55 million) in the three months to June 30, 2023. The improved cash flows and return to profitability have reportedly bolstered the company’s ability to repay debt and manage its finances. The demise of competitor Go First has also benefitted SpiceJet.

In mid-2023, Singh committed to investing INR5 billion (USD60 million) in SpiceJet through fresh equity shares or convertible instruments. That contribution was also designed to assist the airline in accessing a further INR2.06 billion (USD25 million) via the Indian government's Emergency Credit Line Guarantee Scheme. However, India-based news outlets suggest that SpiceJet...

India's Go First faces liquidation after Jindal walks away

Insolvent low-cost carrier Go First (GOW, Mumbai International) faces liquidation following a decision by Jindal Power Ltd not to bid for the airline. The Indian energy company had participated in the expression of interest (EOI) process in September but, according to Reuters and local news outlets, will not proceed with plans to buy the airline.

"The expression of interest process was largely to check the airline's valuation and get access to the company's data," a source close to the talks told the news agency. "After evaluation, the company has decided not to put in a bid."

Prospective buyers had until November 21 to submit their bids. Go First ceased flying in May, soon after filing to enter India's Corporate Insolvency Resolution Process. Creditors, which include banks, lessors, employees, and other suppliers, have since submitted claims for INR65.21 billion rupees (USD782 million). The biggest creditors, the banks, supported selling Go First to Jindal because it was the best hope for recouping some or all of what they are owed.

Several entities had participated...

Go First lenders to fight changes to India's bankruptcy laws

Out-of-pocket lenders grappling with the financial fallout of the collapsed Go First (GOW, Mumbai International) plan to challenge the Directorate General of Civil Aviation's (DGCA) opinion that changes to India's domestic legislation will allow lessors to repossess their airframes and engines from the airline.

Reuters reports that the lenders, who include the Central Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank, to whom the insolvent airline owes a total of USD783 million, intend to dispute the DGCA's legal opinion submitted to the New Delhi High Court in late October which says earlier court orders preventing the repossession and repatriation of aircraft assets will no longer be valid following India bringing its bankruptcy laws into line with the 2001 Cape Town Convention.

The lender's best chance of recouping their money rests in Go First relaunching. They intend to argue that the changes should not impact retrospective court orders. Go First's restart is dependent on the airline retaining aircraft. However, Go First obtained all of its 54 aircraft from lessors. After the airline...

Indian banks walk back commitment to fund Go First's restart

Banks have backtracked on a previous commitment to provide additional funding to Go First (GOW, Mumbai International), according to Reuters. The banks, all with substantial loans placed at the now insolvent low-cost carrier, say the likelihood of the airline resuming services has substantially decreased.

In June, ch-aviation reported that the banks, namely the Bank of India, Bank of Baroda, IDBI Bank, and Deutsche Bank, had approved in principle finance of INR4.25 billion rupees (USD51 million) to relaunch the airline. At the time, there were some signs, including support from lenders and India's Directorate General of Civil Aviation, suggesting that Go First's prospects of relaunching were reasonable.

However, a sustained legal campaign by lessors to repossess aircraft and engines, along with changes to India's bankruptcy laws, which will bring it in line with the Cape Town Convention and make it easier for lessors to reclaim their assets, now suggest the chances of Go First restarting have reduced.

"When the funding was approved, there was some visibility about the airline restarting operations," a unnamed...