AAI asks Kingfisher to pay Rs 390 cr in dues before resuming op
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AAI asks Kingfisher to pay Rs 390 cr in dues before resuming op

Last Updated: Tuesday, February 19, 2013, 18:58
 
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AAI asks Kingfisher to pay Rs 390 cr in dues before resuming op
New Delhi: Troubles never seem to end for Kingfisher Airlines with state-run Airports Authority of India 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 October 1 last year and its flying licence, which was suspended that month, expired on December 31.

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.

PTI



First Published: Tuesday, February 19, 2013, 18:51


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