Jindal Power Explores Go First Acquisition, But Full Bid Uncertain
New Delhi, 15 Oct 2023 – Jindal Power, helmed by billionaire magnate Naveen Jindal, has recently submitted an Expression of Interest (EoI) for Go First, the beleaguered low-cost airline formerly owned by the Wadia family. However, insiders suggest that this move may not culminate in a definitive bid for acquiring the grounded airline, as reported by Mint.
Go First had the distinction of being the first commercial airline in India to voluntarily seek bankruptcy protection, marking a pivotal moment in the country’s aviation industry. As part of the Insolvency and Bankruptcy Code (IBC) process, interested companies are obligated to file an EOI to gain access to the financials and other confidential information of a company under insolvency. Upon approval of the EOI, the interested entity gains access to this sensitive data after the payment of a refundable fee.
One insider shared, “This bid is only to explore the potential of the company and the industry. The company had also expressed interest in other firms that had undergone insolvency proceedings.”
The same source emphasized that despite the buzz surrounding Go First in the aviation sector, it remains uncertain whether the company will indeed submit a formal bid, highlighting the challenges associated with the aviation business.
Both individuals who provided these insights wished to remain anonymous due to the sensitivity of the matter.
This case isn’t an isolated one of a non-aviation company expressing preliminary interest in an airline and subsequently retracting it. In 2019, Anil Agarwal demonstrated interest in Jet Airways but later decided against pursuing it, citing the exploratory nature of his initial interest.
It is worth noting that a private group company within the Jindal conglomerate houses the Jindal group’s three business aircraft and two helicopters, which are occasionally leased for commercial purposes. Nevertheless, the first source indicated that there are no discernible synergies between the Jindal group and the civil aviation business. They stated, “To understand and evaluate the business, we need to submit an EOI.”
The Jindal group’s decision to express interest through privately-held Jindal Power, rather than the publicly listed Jindal Steel and Power Ltd, was attributed to concerns about potential investor reactions.
Go First entered insolvency proceedings due to financial hardships linked to issues with Pratt and Whitney engines in early May. The National Company Law Tribunal’s approval of this plea on 10 May resulted in the suspension of the airline’s board. Subsequently, Go First grounded its fleet in the first week of May. This led to the redistribution of numerous flight routes and airport slots, making the airline’s resurgence a formidable challenge. Furthermore, the aircraft lessors of Go First obtained favorable rulings from the Delhi High Court.
Naveen Jindal-owned companies have been actively exploring expansion opportunities in India and beyond. They are in the process of constructing a steel mill in Nigeria and a power plant in Botswana, signifying their commitment to expanding their presence in Africa. Jindal Steel & Power is also investing a substantial ₹10,000 crore in establishing a 3 million-tonnes-per-annum (mtpa) steel manufacturing unit for their group entity, Vulcan Steel, in Andhra Pradesh.
Also Read: https://aerohubindia.com/airspace-l-bins-soon-to-be-a-part-of-lufthansas-a320s/
