Go First's creditors to auction pledged land parcel in Thane

The latest action by creditors comes even as chances of a revival for the look bleak after the allowed lessors to deregister and take possession of 54 Go First planes, fading hopes of getting a good valuation for the carrier.

"The formal auction process will start after the ads are released in a few newspapers later this week. All have given their go-ahead for the publishing of the ads. Potential bidders will be given about 60 days to make an offer for the land," said a person familiar with the process.

Resolution professional Shailendra Ajmera did not reply to an email seeking comment.

The land parcel is in a prime area in Thane and according to valuations done by lenders, its standalone value could be around ₹1,200 crore. But considering the future development potential and cash flows, the value could rise to at least ₹2,500 crore.

The land was kept as collateral by the for loans taken by Go First. The is owned by the group's realty arm. Lenders want to ensure that recovery from this land is not mixed with plans they are currently examining for the airline.

Lenders are likely to offer this land on an as-is, where-is basis, which means potential bidders will have to deal with any future tax as well as government or other liabilities linked to the land. Of the 94 acres, about four acres have been taken over by the Thane Municipal Corporation for road widening and beautification purposes, which will have to be accounted for.

Lenders are moving to get value from the land even as the Delhi HC's order allowing lessors to deregister and take possession of the planes means there is very little in the airline to sell as a going concern.

Creditors are still in deliberations on the future course of action with the June 4 extended deadline for the process, looming. Creditors will most likely seek another extension next month even as the two bidders in the fray - a consortium of Nishant Piti, CEO of EaseMyTrip, and Ajay Singh, chairman of budget airline SpiceJet, and second bidder Sharjah-based Sky One Aviation are still evaluating options in light of the court order.

Both bidders have included future arbitration claims from Go First's proceedings against engine maker Pratt & Whitney (P&W) in their respective resolution plans. Sky has offered ₹735 crore upfront in cash and up to 20% of arbitration claims in the future while Ajay Singh has offered to pay ₹650 crore over 12 months and 10% of arbitration claims.

Go First owes creditors more than ₹6,200 crore. , and are the secured creditors with ₹1,934 crore, ₹1,744 crore and ₹75 crore of admitted claims, respectively.