Must pay Rs 390 cr dues to fly again, AAI tells Kingfisher
21 Feb 2013 4:46 AM IST
Troubles never seem to end for Kingfisher Airlines with state-run Airports Authority of India on Tuesday tightening the noose saying it wanted a 'firm commitment' from the grounded carrier for clearance of over Rs 390 crore worth of dues before it is allowed to fly again.
'Our dues are more than Rs 390 crore, inclusive of penal interests. So we are asking a firm commitment in that because so far, what they have committed could not be honoured. We are asking for a firm commitment on the payment of the dues,' AAI Chairman V P Aggarwal said here.
Replying to questions, he said 'though there is news that they are planning to restart operations, but there has not been any concrete proposal to us for dilution of our dues.'
Asked whether the state-run airports body would settle for some 'partial payment' of dues, Aggarwal said 'we already had some cheques (from Kingfisher). One cheque of Rs 117 crore could not be encashed.
'That's an issue and the remaining (amount) was not covered and does not have any sort of guarantee. They have to give some guarantee. Bank cheques were presented but they bounced. A legal issue is going on.'
To a question on whether the seizure of Kingfisher aircraft due to non-payment of dues was affecting the interests of lessors and was violative of the Cape Town Convention, the AAI chief said 'I do agree that this is a problem as far as the Convention is concerned. We will soon have a meeting with Secretary on the issue soon.'
He said it was 'government's money that has to be securitised first. Some things you pay, some things you have to securitise or guarantee.'
Aggarwal said several of Kingfisher's planes have been seized by airport operators or the Service Tax Department and parked at various airports till the airline cleared its dues. The Cape Town Convention on International Interests in Mobile Equipment or Cape Town Treaty is an international treaty intended to standardise transactions involving movable property like aircraft and aircraft engines and railway equipment.It creates international standards for registration of ownership, leases and sale contracts and provides legal remedies for default in financing agreements, including repossession and the effects of bankruptcy laws.Besides its dues to AAI and other service providers, Kingfisher has a debt of over Rs 7,000 crore to a consortium of 17 banks led by SBI. SBI has the maximum exposure of over Rs 1,600 crore in the Vijay Mallya-led airline, followed by PNB with Rs 800 crore, IDBI Rs 800 crore, Bank of India at Rs 650 crore and Bank of Baroda has Rs 550 crore.
Kingfisher, which has over Rs 15,000 crore in the form of debt, accumulated losses and various dues, has remained grounded since 1 October last year and its flying licence, which was suspended that month, expired on 31 December.
The airline also has dues towards payment of service tax, income tax, as also Provident Fund of employees and dues of the oil companies. Besides, it has to pay huge amounts to the lessors of its aircraft and service providers like Airports Authority of India.
MALLYA SURPRISES SOME STAFF BY PAYING MONTH’S SALARY
A week after its lenders decided to recover their dues, cash-strapped Kingfisher Airlines has started paying salaries to its employees apart from approaching the aviation regulator seeking licence renewal, sources said on Tuesday.
'Some of us have received salary dues. Those in the lowest package as well as some engineers and pilots have also a month's salary dues,' sources said.
The airline has not been paying salary to its employees since May last year, while it had started delaying salaries much before the crisis broke out last October.
The sources also said airline Chief Executive Sanjay Agarwal is in the capital to meet the Directorate General of Civil Aviation (DGCA) to make a fresh request to resume operations.
However, both the developments could not be officially confirmed.
UB Holdings has sought approval from its shareholders to revise the lending limit for Kingfisher and to authorise its board of directors to take necessary actions in this regard, the company had said on Monday.
'Our dues are more than Rs 390 crore, inclusive of penal interests. So we are asking a firm commitment in that because so far, what they have committed could not be honoured. We are asking for a firm commitment on the payment of the dues,' AAI Chairman V P Aggarwal said here.
Replying to questions, he said 'though there is news that they are planning to restart operations, but there has not been any concrete proposal to us for dilution of our dues.'
Asked whether the state-run airports body would settle for some 'partial payment' of dues, Aggarwal said 'we already had some cheques (from Kingfisher). One cheque of Rs 117 crore could not be encashed.
'That's an issue and the remaining (amount) was not covered and does not have any sort of guarantee. They have to give some guarantee. Bank cheques were presented but they bounced. A legal issue is going on.'
To a question on whether the seizure of Kingfisher aircraft due to non-payment of dues was affecting the interests of lessors and was violative of the Cape Town Convention, the AAI chief said 'I do agree that this is a problem as far as the Convention is concerned. We will soon have a meeting with Secretary on the issue soon.'
He said it was 'government's money that has to be securitised first. Some things you pay, some things you have to securitise or guarantee.'
Aggarwal said several of Kingfisher's planes have been seized by airport operators or the Service Tax Department and parked at various airports till the airline cleared its dues. The Cape Town Convention on International Interests in Mobile Equipment or Cape Town Treaty is an international treaty intended to standardise transactions involving movable property like aircraft and aircraft engines and railway equipment.It creates international standards for registration of ownership, leases and sale contracts and provides legal remedies for default in financing agreements, including repossession and the effects of bankruptcy laws.Besides its dues to AAI and other service providers, Kingfisher has a debt of over Rs 7,000 crore to a consortium of 17 banks led by SBI. SBI has the maximum exposure of over Rs 1,600 crore in the Vijay Mallya-led airline, followed by PNB with Rs 800 crore, IDBI Rs 800 crore, Bank of India at Rs 650 crore and Bank of Baroda has Rs 550 crore.
Kingfisher, which has over Rs 15,000 crore in the form of debt, accumulated losses and various dues, has remained grounded since 1 October last year and its flying licence, which was suspended that month, expired on 31 December.
The airline also has dues towards payment of service tax, income tax, as also Provident Fund of employees and dues of the oil companies. Besides, it has to pay huge amounts to the lessors of its aircraft and service providers like Airports Authority of India.
MALLYA SURPRISES SOME STAFF BY PAYING MONTH’S SALARY
A week after its lenders decided to recover their dues, cash-strapped Kingfisher Airlines has started paying salaries to its employees apart from approaching the aviation regulator seeking licence renewal, sources said on Tuesday.
'Some of us have received salary dues. Those in the lowest package as well as some engineers and pilots have also a month's salary dues,' sources said.
The airline has not been paying salary to its employees since May last year, while it had started delaying salaries much before the crisis broke out last October.
The sources also said airline Chief Executive Sanjay Agarwal is in the capital to meet the Directorate General of Civil Aviation (DGCA) to make a fresh request to resume operations.
However, both the developments could not be officially confirmed.
UB Holdings has sought approval from its shareholders to revise the lending limit for Kingfisher and to authorise its board of directors to take necessary actions in this regard, the company had said on Monday.
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