Lenders slash Go First land price in fresh recovery bid

MUMBAI: Lenders to the defunct Go First Airlines, led by Central Bank of India, are making a third attempt to recover some dues from the company's 94-acre land parcel in Thane even as arbitration proceedings, initiated by the erstwhile airline owners and pursued by the lenders, against engine maker Pratt & Whitney (P&W) continue.

Lenders have set a reserve price of Rs 1,604 crore, down 10% from Rs 1,782 crore set in their last attempt in March this year, documents accessed by ET showed. Go First owes creditors more than Rs 6,200 crore in aggregate.

This is the second markdown on the land parcel by lenders. They had first put the property for sale in July 2024 for Rs 1,966 crore.

Interested bidders must deposit Rs 80.20 crore as earnest money by December 4. If there is sufficient interest, the electronic auction would be conducted on December 5, the documents show.

"This is the second time we have lowered the price. The size and scale of the land parcel means only a handful of real estate companies or funds have a wherewithal to invest and make a return from the land because this is a huge land parcel where only a full fledged township has to be created from scratch for it to make any money," a person familiar with the process said.

Lead lender Central Bank of India did not reply to an email seeking comment.

Go First was ordered into liquidation in January this year after attempts to find a new owner for the airline came to naught after more than a year of trying. Selling this land parcel is one of the two last recovery attempts by lenders, the other being ongoing arbitration proceedings in Singapore.

P&W Blamed
Lenders have continued arbitration proceedings started by the previous management in Singapore against US-based engine maker P&W, seeking more than $1 billion from P&W, blaming it of supplying faulty engines that were not replaced on time, resulting in the grounding of half the airline's fleet and leading it to bankruptcy.