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SpiceJet shares hit 52-week high following this big acquisition ‘interest’
The shares of SpiceJet hit a 52-week high of ₹69.20 following the plans to acquire GoFirst.
Private carrier SpiceJet on Tuesday expressed its interest to acquire GoFirst and is planning to submit its offer after carrying out due diligence of the bankrupt airline. The shares of SpiceJet have hit a 52-week high following the announcement.
In May this year, GoFirst had filed for voluntary insolvency before the National Company Law Tribunal, a decision triggered by Pratt & Whitney engine issues.
Voluntary insolvency is a process in which the company says it cannot pay debts and needs help from someone to help it out. When the company goes insolvent, it can proceed to voluntary liquidation.
According to a PTI report, SpiceJet in its regulatory filing said it has expressed interest with the resolution professional of the grounder airline and wishes to submit an offer post diligence, with a view of creating a ‘strong and viable airline’ in a possible combination with SpiceJet.
"The bid that has come from SpiceJet is surprising," Prabhudas Lilladher analyst Jinesh Joshi told news agency Reuters.
The shares of SpiceJet hit a 52-week high of ₹69.20 following the plans to acquire GoFirst. Earlier in the day, SpiceJet shares had opened in green at ₹66, higher than the Monday's closing price of ₹64.21.
What happened to GoFirst?
In a statement issued on the day it filed for voluntary insolvency proceedings, GoFirst had said the step was initiated due to an increasing number of faulty engines supplied by Pratt & Whitney's International Aero Engines. As a result, the airline was forced to ground 25 aircraft, approximately 50 per cent of its Airbus A320neo aircraft fleet as of 1 May 2023.
GoFirst said it had been forced to apply to the company law tribunal after P&W refused to comply with an award issued by an emergency arbitrator appointed in accordance with the 2016 Arbitration Rules of the Singapore International Arbitration Centre (SIAC).
