The liquidation process for grounded airline Go First is facing significant delays as attempts to sell assets fail. The liquidator has slashed reserve prices by up to 34% for items like ground equipment and a large Thane land parcel. These repeated markdowns highlight the difficulty of recovering debt for creditors, who are owed over ₹6,521 crore by the company.
The insolvency and liquidation process of Go First (formerly GoAir) is proving to be a difficult path for creditors, with repeated attempts to auction assets failing to find takers. The liquidator has been forced to significantly reduce reserve prices for both land and specialized aviation equipment, reflecting a clear mismatch between estimated valuations and actual buyer demand in the current market.
The most prominent asset, a 95-acre land parcel in Thane, has failed to secure a buyer even after a 30 percent reduction in its reserve price to ₹1,375 crore. Similarly, operational assets such as cabin catering trolleys have seen their reserve prices slashed by nearly 34 percent. Other ground support equipment, including pushback tractors, ground power units, and coaches, have also experienced cumulative markdowns of approximately 19 percent. These downward revisions signal that the initial valuations of these assets are struggling to find support from interested parties.
Challenges in Recovering Creditor Debt
For the airline's financial creditors, who are owed ₹6,521 crore, the ongoing delays and price cuts are concerning. The total liabilities of the company exceed ₹11,000 crore, and the final recovery for lenders depends entirely on the realized value of the remaining inventory. The difficulty in finding buyers for specialized aviation equipment underlines the risk inherent in distressed asset sales, as there is often a very limited pool of potential buyers for such niche assets.
The situation draws parallels to the insolvency of Kingfisher Airlines, where key properties like the Kingfisher House were eventually sold at a 65 percent discount from the original reserve price after multiple failed auction attempts. This historical context serves as a reminder that asset value in a liquidation scenario is often dictated by immediate buyer appetite rather than historical cost or initial appraisal.
Stakeholders and creditors will now monitor the upcoming auction rounds to see if these deeper price cuts finally succeed in clearing the remaining inventory. The ultimate realization of funds for lenders will be contingent on the ability to attract credible bids for the company's remaining assets in the coming months.