Lenders to Go Air expect recovery in H1FY26, collateral assessment underway

Conducting diligence on collateral, including land

Lenders to defunct Go First Airline are expecting recovery in the first half of the financial year 2026 (H1Fy26) while they are engaged in a due diligence process for monetisation of its assets. The dues are about Rs 6,200 crore.

 

On January 21, 2025, the National Company Law Tribunal (NCLT) ordered the liquidation of low-cost carrier Go First on the request of its Committee of Creditors (CoC). It brought an end to the 20-month-long insolvency proceedings. A CoC is a group of lenders who work together to decide the future of a borrower's debt.

 

A senior public sector executive said the due diligence on the collateral including land in Thane is underway. Unless it (assessment) is crystallised, lenders are constrained to give estimates about specific amounts (in recovery). The recovery in this airline account is unlikely in the current quarter (Q4Fy25). It looks like the prospects for recovery are better in the first half of H1Fy26.

 

Central Bank of India, Bank of Baroda, and IDBI Bank are some of the secured creditors of the airline, with admitted claims of Rs 1,934 crore, Rs 1,744 crore, and Rs 75 crore, respectively.

 

Senior executive with a private sector lender said there was land asset (a prime 94-acre parcel) in Thane (Maharashtra) under a distinct entity as collateral for the loan. It would take time for legal process and financial assessment on payments. At present, it looks that lenders would recover principal only early next financial year.

 

The exposure has been fully provided in line with regulatory requirements for taking assets for resolution under Indian Bankruptcy Code (IBC). The airline had filed for voluntary insolvency on May 2, 2023 under Section 10 of the IBC, and on May 10, 2023 the NCLT admitted its plea. The airline joined the ranks of major carriers like Kingfisher Airlines and Jet Airways, which faced similar fate in 2012 and 2019, respectively that highlighted the persistent challenges in India’s aviation industry.

 

In September 2024, the CoC filed an application to liquidate the company, with no signs of revival of the airline.