SpiceJet Shares Hit Upper Circuit, Up 20% On Go First Acquisition News

SpiceJet shares traded on a new 52 Week High value of 64.29 in the intraday trading on Monday (December 18) after a media report highlighted that India's budget airline Spicejet, along with two others including Sharjah-based Sky One company, and Africa-focused Safrik Investments have shown interest in acquiring the cash-strapped low-cost carrier Go First.

In today's intraday trading session, SpiceJet shares touched an upper circuit of Rs. 64.29. The share price of SpiceJet Ltd skyrocketed 19.99% at Rs 64.29 per share at 3:25 pm IST today.

SpiceJet stock price grabbed attention after CNBC-TV18 reported that the trio - Spicejet, Sky One company, and Safrik Investments have requested the resolution professional overseeing Go First's corporate insolvency resolution process (CIRP) to conduct due diligence on the grounded airline.

The request comes after the deadline for submitting proposals passed. Meanwhile, it has also come to the limelight that all three companies have reportedly asked for an extension of the deadline,

The last date for submission of the bids concerning the acquisition of the airline was November 22. After the deadline passed it is believed that the lenders were considering liquidation of Go First as they did not receive any bids till the last date.

The Wadia group-owned Go First, and filed for voluntary insolvency before the National Company Law Tribunal (NCLT) in the month of May. Half of Go First's fleet was grounded in May after the issue of faulty engines.

In the same month, Go First also filed for bankruptcy and blamed US-based engine manufacturer Pratt & Whitney (P&W) for its dire situation. The embattled airline said 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"

Last month, Go First's chief executive officer, Kaushik Khona, resigned from his post.

Go First lenders sought $1 billion from Pratt & Whitney for supplying faulty engines and failing to replace them on time.

As per reports, the lenders are not confident of the capabilities of Sky One and Safrik as the duo do not have much experience in handling passenger flights. SpiceJet, on the other hand, comes out to be a strong contender here. It is worth mentioning that SpiceJet is itself struggling with a cash crunch. Last week, the SpiceJet Board approved a proposal to raise up to Rs 2,250 crore via the issue of shares.

In a letter, SpiceJet has reportedly indicated that it was recently able to raise Rs 2,250 crore and it could utilize a portion of these funds to acquire GoFirst.