Wadia Group affirms financial strength despite Go First’s bankruptcy; Sky One and SpiceJet express interest in acquisition

The Wadia Group, under the leadership of Nusli Wadia, has firmly stated that the bankruptcy of its budget airline, Go First, in May last year, will not impede its ability to raise funds for other businesses within the conglomerate in the future.

Reports indicate that the credit ratings of all Wadia Group companies remain robust.

Established in 2005, Go First filed for voluntary bankruptcy in May 2023, citing outstanding debts exceeding Rs 6,521 crore, primarily owed to lenders, with a significant portion owed to public sector banks.

Amid speculations that the Wadia Group might submit a bid for Go First, potentially with the involvement of a global fund, the conglomerate ultimately did not proceed with such a bid.

In a surprising turn of events in December, Sky One, an aviation company based in Sharjah, and SpiceJet expressed interest in acquiring the financially-beleaguered Go First.

This development occurred after the proposal deadline had passed and while lenders were considering the possibility of liquidation.

Both entities sought permission from Shailendra Ajmera, the Resolution Professional overseeing Go First’s Corporate Insolvency Resolution Process (CIRP), to conduct due diligence on the grounded airline.

Recently, the RP of cash-strapped Go First airline submitted an affidavit in the Delhi High Court stating that 2,278 employees remain on the rolls of the company, out of which none are at present reporting to work.

“Various personnel of the engineering and records team who were required to undertake maintenance activities have either gradually resigned or are not reporting to work due to non-payment of salaries,” read the affidavit by RP Shailendra Ajmera.

“As on insolvency commencement date the number of employees on the rolls of the Corporate Debtor stood at approximately 4,621. However, as of 10.10.2023, approximately 2,278 employees remain on the rolls of the company, out of which none are at present reporting to work,” it said.

The RP’s affidavit comes after the lessor filed a contempt petition, alleging that Ajmera did not permit them to inspect the aircraft and did not maintain them as per court directions.