By Kashish Tandon and Nandan Mandayam
BENGALURU (Reuters) -Indian budget carrier SpiceJet said on Friday its managing director, Ajay Singh, and Busy Bee Airways had submitted a joint bid for Go First airlines and that it would be the operating partner for its bankrupt rival.
SpiceJet, which is cutting costs and raising funds to tide over its own financial troubles, did not disclose any financial details for Singh’s bid that the airline’s largest shareholder made in his personal capacity.
SpiceJet shares closed 11.3% higher on Friday.
Go First, which filed for bankruptcy in May last year, had received expressions of interest from Singh, Busy Bee and Sky One Airways by the Jan. 31 deadline, Reuters had reported.
Sky One has also submitted a bid for Go First, the UAE-based airline’s chairman told news channel CNBC-TV18.
Sky One and Go First’s resolution professional did not immediately respond to a Reuters request for comment.
SpiceJet, which had previously shown interest in buying Go First itself, said it would provide staff and services for the new airline.
Being an operating partner for Go First would likely help expand cash-starved SpiceJet’s revenues, said Jinesh Joshi, a research analyst at Prabhudas Lilladher.
However, Joshi said it would be worth observing how Singh would devote his time between the two airlines should his bid succeed “given one airline would be owned in his personal capacity.”
SpiceJet, once India’s second-largest airline, has raised funds from investors, including Singh, and a government credit line over the past year to repay lessor dues and revive its grounded fleet. It even cut jobs earlier this week to save $12 million annually.
That has helped its stock price surge nearly three-fold since hitting an over seven-year-low last May, around when Go First filed for bankruptcy.
(Reporting by Kashish Tandon and Nandan Mandayam in Bengaluru; Editing by Savio D’Souza)
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