Go First crisis: Wadia’s Thane land up for auction

In November, the airline’s resolution professional told the Mumbai NCLT that only 19% or R 6,604 crore of the R28,558 crore of claims from 8,019 creditors were admitted.
Image of a Go First plane.
Image of a Go First plane. (Photo | Special Arrangement)

MUMBAI: Central Bank of India, the lead banker in the consortium of lenders of the bankrupt airline Go First (formerly GoAir), has put on block the 94.7-acre land parcel owned by Wadia Realty in Thane to recover their dues from the Wadias through an auction scheduled for July 22 and has set R1,965 crore as the reserve price.

The other lenders in the consortium include Bank of Baroda, IDBI Bank and Dena Bank. The airline owes R3,918 crore to these four banks and Central Bank has the maximum claim of R1,934 crore, followed by Bank of Baroda (R1,744 crore) and Dena Bank (R 75 crore), the amounts include principal and interest as of August 31, 2023. The dues of IDBI Bank is not known.

And at R1,965 crore as the reserve price, the banks may be able to recover 50%, which is not bad given that this is far higher than IBC recoveries and also liquidation from which they may get nearly nothing.

A Central Bank official told TNIE that the lenders have decided to auction the Thane land parcel as this land bank is part of the corporate guarantee extended by the group company Waida Realty. When pointed out that since separate recovery measures are not allowed under the IBC, how the auction can proceed, he said the legal opinion is favourable to us.

In November, the airline’s resolution professional told the Mumbai NCLT that only 19% or R 6,604 crore of the R28,558 crore of claims from 8,019 creditors were admitted. This included R5,639 crore of claims from financial creditors/lenders, of which 68% were admitted, and the remaining was under verification. The claims from operational creditors stood at R19,701 crore, of which a paltry 4%were admitted.

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