Disburses a month’s salary, gets more loan commitment, but troubles continue.
Bureau Report
CHENNAI: Even as Kingfisher Airlines tried to pave the way for it to resume operations by paying a month’s salary to some of its employees, and one of its backers doubled its loan amount committed, the Airport Authority of India (AAI) has said it wanted a firm commitment on payment of dues before it allows the airlines to resume operations.
The AAI said it wants a firm commitment from Kingfisher on payment of Rs. 390 crore ($72 million) dues.
“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 honored. We are asking for a firm commitment on the payment of the dues. There is news that they are planning to fly again but no concrete proposal has been put forward on dilution of our dues,” AAI chairman V.P. Aggarwal was quoted as saying by The Hindu.
Asked if AAI would settle for part payment, Aggarwal said: “We already have some checks from Kingfisher. One check of Rs. 117 crore ($21.5 million) 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 check were presented but they bounced. A legal issue is going on,” he added.
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, said the Hindu. Last week, the lenders to the airline, which number as many as 17 banks which together had extended Rs. 7,000 crore ($1.29 billion) to the company, had resolved to recall their loans to the airline, which had been grounded since October one last, saying more than enough time was given to the management to revive the crippled airline.
Kingfisher though is trying to make amends and bring in goodwill from some of its employees, at least.
The cash-strapped airlines has started disbursing some staff salaries after a gap of almost two and half months, reported the Business Line. Sources said that sections of the staff, mainly airport staff, received their salaries for June 2012, yesterday.
The monthly salary outgo for the airline is around Rs. 20 crore ($3.7 million) and its staff members have not been paid regular salaries since June last year. In November last year the airline cleared some back wages with a promise of settling more wages. This promise was not fulfilled. The airline has over 4,000 people on its rolls, said the report.
Shares of Kingfisher Airlines surged as much as 5% on the bourses in afternoon trade today, after its group holding firm United Breweries (Holdings) hiked its loan limit for the ailing carrier to Rs. 750 crore ($138 million) from Rs. 300 crore ($55 million), reported The Hindustan Times.
UB Holdings has sought approval from its shareholders to revise the lending limit for Kingfisher and to authorize its board of directors to take necessary actions in this regard, the company had said yesterday.
Reacting to the development, shares of the company opened on a bullish note and then gained further ground and touched an intra-day high of Rs. 10.53 ($0.19) on the BSE, higher by 5% from its previous closing price. Similar movement was witnessed on the National Stock Exchange, where the stock gained 5% and hit the upper circuit limit for the day at Rs. 10.50.