Corporate May 9, 2012
If the Airports Authority of India (AAI) has its way, Kingfisher Airlines' properties might be attached soon. Fed up with the non-payment of airport dues by ailing Kingfisher and frequent instances of the airline's cheques bouncing, AAI has served a legal notice to the airline in Mumbai.
It plans to file a legal suit within 15 days of the notice.
AAI Chairman V P Aggarwal told Firstpost that the airline's dues stand at Rs 270 crore. "Kingfisher's total dues are about Rs 270 crore, out of which Rs 140 crore is owed to us because Kingfisher's cheques have bounced at various times. The remaining Rs 130 crore is also being sought. So, while the legal notice seeks immediate payment of Rs 140 crore, we can actually ask the courts to attach the airline's properties for the remaining amount."
Kingfisher is already reeling under debt of over Rs 7,000 crore and fighting battles on several fronts, including non-payment of employee salaries.
Besides, a Times of India report earlier this month said that UB Holdings (Kingfisher's parent company) is in talks with private equity funds Blackstone and Kohlberg Kravis Roberts to sell some of its commercial real estate for Rs 650 crore. The report said Kingfisher promoter Vijay Mallya is looking to sell UB Tower in Bangalore. Prakash Mirpuri, a UB spokesman, however, denied any plans to sell the tower.
An aviation industry expert pointed out that even if AAI succeeds in attaching properties owned by Kingfisher Airlines, there is no guarantee that AAI will recover its dues - because there are a number of creditors, to whom much larger sums are owed by the airline. Already, Kingfisher has stopped all international operations and reduced its daily flights to a quarter of what it used to be.
Not just Kingfisher, even national carrier Air India (AI) continues to owe money to AAI. The only difference is that since AI is a government-owned company, AAI cannot act tough with it. AI owes AAI a whopping Rs 1,300 crore - almost five times the amount Kingfisher owes - of which it paid only Rs 57 crore very recently. AAI's hands seem to be completely tied in this case.
Airlines owe AAI for using airports owned by it and need to pay charges for landing, parking and using other facilities at the airports which AAI owns.
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