Go Air crisis: Central Bank set to auction Wadia’s land for Rs 1,965 cr
The Central Bank of India will auction over 94 acres of land owned by Wadia Realty situated at Bhayandarpada on Thane’s Ghodbunder Road, to recover loans extended to Go Airways.
The reserve price for this auction is set at Rs 1,965 crore, according to a report in The Times of India.
Following Wadia Realty’s role as the mortgagor and corporate guarantor of the defaulted airline, an auction has been scheduled. The property, pledged to the Central Bank of India, the Bank of Baroda, and the IDBI Bank, will be sold under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002.
Set for July 22, the auction aims to recover a portion of the total outstanding debt of Rs 3,918 crore, inclusive of principal and accrued interest as of August 31, 2023. An earnest money deposit of Rs 98 crore, constituting 5 per cent of the reserve price, is mandatory, the report stated.
This move follows Go Airlines’ bankruptcy, now undergoing insolvency resolution proceedings under the Insolvency and Bankruptcy Code (IBC).
Led by industrialist Nusli Wadia, the Wadia group, previously known for its flagship businesses Bombay Dyeing and Britannia Industries, has significantly shifted focus towards real estate to capitalise on its substantial land assets in Mumbai. Last year, the group sold prime real estate in Worli, some of which was encroached upon, to Sumitomo Realty and Development Company to settle debts and finance upcoming ventures, the report said.
The Central Bank previously announced full provision for its loan to the airline and has already issued a public notice under the SARFAESI Act for the acquisition of the land parcel, now set for auction. The Bank of Baroda, another lender, expressed confidence in recovering its dues entirely through the sale of real estate security.
Go Air files for bankruptcy
In May last year, Go Air filed for bankruptcy and said it owes financial creditors $798 million.
As of April 30, Go Air had not defaulted on any of these dues. “However, considering the present financial situation of the corporate applicant, defaults to financial creditors would be imminent,” the company said in a filing.
In the filing, the company listed the Central Bank of India Ltd, Bank of Baroda Ltd, IDBI Bank Ltd, Axis Bank Ltd and Deutsche Bank among Go Air’s financial creditors.
First Published: Jun 07 2024 | 6:02 PM IST