Lenders plan fresh auction of defunct airline Go First's Thane land

Financial creditors to defunct airline Go First are set to auction by next month its land parcels in Thane to recover dues of around ₹2,000 crore.

  These land plots, to be auctioned for a third time, are collateral for loan exposures.

  “The lenders are in talks with reputed builders who have shown an interest in acquiring the Thane land asset, which enhances the prospects for full recovery. Additionally, there are arbitration proceedings going on in Singapore and some other countries related to the contractual disputes with engine suppliers. These arbitration outcomes could potentially support the resolution process further,” said a senior banking official. 

The official added the lenders were considering a relaxation of some eligibility criteria because the existing rules had made it difficult to sell the land parcels. 

“Auctioning large parcels poses its own challenges,” he added. 

  Public-sector bank Central Bank of India has taken possession of immovable properties of 94.71 acres abutting Ghodbunder Road, Thane, on behalf of Bank of Baroda, IDBI Bank, and itself. The land is in the name of Wadia Reality Private Ltd. Central Bank of India, Bank of Baroda, and IDBI Bank are some of the secured creditors to the airline, with admitted claims of ₹1,934 crore, ₹1,744 crore, and ₹75 crore, respectively.

 

“Learning from past auctions, this time we are planning to adopt a more aggressive approach with our roadshows,” said the bank executive.  

An email sent to the three lenders remained unanswered until the time of going to press. 

  “In addition to focusing on major builders that have the capacity to take over the land, we are looking at smaller builders. So far, we’ve received an encouraging interest from them. We hope to recover a portion of the dues, which will then be distributed among the lenders in proportion to their loan exposures,” said the official.

  The airline had filed for voluntary insolvency in May 2023 and on January 21 this year the National Company Law Tribunal (NCLT) ordered its liquidation on the request of its committee of creditors (CoC), which is a group of lenders that work together to decide the future of a borrower’s debt.

  That ended the 20-month-long insolvency proceedings.

  The lenders have fully provided for credit exposure to the airline in line with regulatory requirements for taking over assets for resolution under the Insolvency and Bankruptcy Code.