Go First Lenders Took Over 94 Acres of Land For Auction
MUMBAI- Lenders at the forefront have initiated actions to assert their rights over a 94-acre land parcel pledged as collateral for loans acquired by the Go First airline.
Despite requesting an extension from the National Company Law Tribunal (NCLT) to finalize the resolution process, the lenders have symbolically taken possession of the land in Thane. This marks the initial move towards a potential auction of the property.
Go First Lenders Land Possession
In the realm of legal terms, symbolic possession denotes that while physical possession remains with the company, lenders retain the right to pursue recovery actions.
A source familiar with the situation mentioned that lenders are anticipated to declare symbolic possession through newspaper advertisements next week. These lenders aim for a recovery exceeding ₹2,000 crore for the land, given that the airline is indebted to its creditors for over ₹6,200 crore.
This parcel of land spans 94 acres and holds a prime location in Thane. According to various assessments conducted by lenders, its individual worth could amount to approximately ₹1,200 crore.
However, factoring in its potential for future development and anticipated cash flows, the value could escalate to at least ₹2,500 crore. All these variables will be deliberated upon before establishing the minimum auction price,” the individual stated.
The land, pledged by the Wadia group as collateral for loans acquired by Go First, is owned by the group’s real estate division. Lenders aim to ensure that the proceeds from this land’s sale remain separate from the ongoing deliberations concerning the airline’s future plans.
The issuance of the possession notice next week is expected to be followed by thorough due diligence and final appraisals leading up to a potential auction within a month. Lenders are likely to offer the land in its current condition, implying that prospective bidders will be responsible for any future taxes, government obligations, or other liabilities associated with the property.
Out of the 94 acres, approximately four have been appropriated by the Thane Municipal Corporation for road expansion and beautification purposes, necessitating consideration. Additionally, as the land lacks fencing, bankers are keen to expedite the auction process to forestall any potential encroachments in the future.
Potential Buyers
Lenders have requested a third extension to the debt resolution timeframe for the airline, extending past the April 4th deadline, even though conclusive negotiations with potential buyers have not yet begun.
Sky One, an aviation company headquartered in Sharjah led by Jaideep Mirchandani, and Busy Bee Airways, owned by Ajay Singh of SpiceJet (SG) and Nishant Pitti of EaseMyTrip, are the two contenders vying for the airline.
Both bidders have incorporated anticipated arbitration claims from Go First’s legal proceedings against engine manufacturer Pratt & Whitney into their resolution proposals.
The three primary creditors of Go First include the Central Bank of India, with acknowledged claims totaling ₹1,934 crores, Bank of Baroda, with ₹1,744 crores, and IDBI Bank, with ₹75 crores.
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