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Money Aug 28, 2012

Bounced cheques: Kingfisher dragged to court, stock down 6%

By Firstbiz Staff

Now a mere penny stock, cash-strapped Kingfisher Airlines is down 6 percent in trade after GMR Hyderabad International Airport (GHIAL) filed a petition against the airline for dishonouring cheques worth Rs 10.3 crore.

The cheques were issued toward airport charges (parking, landing and navigation) but later bounced. The airport has now filed a case against Vijay Mallya's airline in Nampally criminal court in Hyderabad for dishonouring the cheques.

At 1:37 pm, the stock was trading 6.09 percent lower at Rs 8.31 on the Bombay Stock Exchange, while the Sensex was down half a percent at 17597.

PTI

Earlier in June, Mumbai International Airport, run by GVK Group, had filed a case against Kingfisher in a Mumbai criminal court after one of its checks bounced.

Delhi International Airport Ltd (DIAL) run by GMR group had filed a similar case dishonoured cheque of Rs 3 crore.

Kingfisher Airlines' loss widened to Rs 651 crore for the quarter ended June 30 2012 from Rs 264 crore a year ago.

Even the Centre for Asia Pacific Aviation (CAPA) said last week the airline may have to shut down operations if $600 million cash is not infused in the next two months.

The airline has also faced frequent labour unrest with one group or the other going on flash strike demanding payment of salaries and other reimbursements. The airline had the lowest market share in July which stood at 3.4 percent.

by Firstbiz Staff

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