Go First crisis: Airline creditors to auction prime 94-acre land parcel in Thane

Creditors of grounded Go First Airlines are now set to auction a prime 94-acre land parcel, which was kept as a collateral with them in Thane. The creditors have set around Rs 1,960 crore as the reserve price for the property. 

According to a report in The Economic Times, the auction process would start after newspaper advertisements are published this week. The latest action by the creditors come at a point when revival of the grounded airline looks bleak. 

A person familiar with the matter said that all lenders have given their nod for the publishing of the ads. Potential bidders would be given about 60 days to make an offer for the land, the source said. 

The land parcel in question is in a prime area and could be valued at around Rs 1,200 crore. The value could rise to at least Rs 2,500 crore if the future development potential and cash flows are taken into account. Of the 94-acres, 4 acres have been taken over by the Thane Municipal Corporation for road widening and beautification purposes. 

According to the report, the land was kept as collateral by the Wadia group for loans taken by Go First. The property is owned by the group’s realty arm.

This comes after the Delhi High Court allowed lessors of Go First to deregister and take possession of 54 planes. 

Go First that filed for insolvency on May 2, 2023, ceased its operations the next day. It blamed its financial woes on the ‘faulty’ engines of Pratt & Whitney that led to the grounding of half of its fleet. It has liabilities worth Rs 11,463 crore to all its creditors combined. 

In fact, as per recent reports, the airline is at the risk of losing its airport slots and international flying rights. It has been a year since the airport operated any flight.