K'fisher wants Govt help to avoid disruption

Kingfisher, AI owe govt Rs 360 crore towards service tax dues

PTI | January 11, 2012



Burdened by debts and losses, Kingfisher Airlines sought government help on extending the time for repaying the banks and credit for its jet fuel requirements to avoid serious disruption of it operations.

Kingfisher promoter Vijay Mallya is understood to have written to civil aviation minister Ajit Singh seeking help on these issues, saying the airline's lessors have moved court in the UK on alleged non-payment of lease rentals on aircraft.

Mallya is believed to have said that if help on these matters was not forthcoming, then it could adversely affect Kingfisher's normal operations.

While the UB Group chief has sought a 15-day credit from Hindustan Petroleum Corporation to meet its fuel requirements, it has also sought a temporary extension of time to repay the banks for its working capital loans.

He is understood to have indicated that since the aircraft lessors have gone to court, immediate payments have to be made to them to keep the fleet of the private airline flying.

When contacted, a Kingfisher spokesperson today refused to comment on the matter.

In the recent weeks, Mallya, who is also a rajya sabha MP, has held a series of meetings with top government functionaries, including finance minister Pranab Mukherjee, to work out steps to keep the airline afloat.

Kingfisher has also come under flak from civil aviation regulator DGCA over safety issues following a financial surveillance. However, the airline has submitted its response to the DGCA saying it maintained the highest safety standards

Debt-ridden Kingfisher Airlines and Air India owe the government a total of over Rs 360 crore towards service tax dues, a senior Finance Ministry official said today.

"While the Kingfisher Airlines has paid Rs 20 crore towards service tax for December and some arrears, the airline still owes Rs 60.33 crore," chairman of Central Board of Excise and Customs (CBEC) S K Goel told reporters.

The Vijay-Mallya promoted airlines made the Rs 20 crore payment in January, he said adding the carrier has promised to clear all dues by March-end.

Goel also said the state-owned Air India owes Rs 300 crore to the government.

"AI has informed us that they would be clearing the dues once the government infuses capital in the carrier," he added.

The state-owned carrier is seeking an equity infusion of Rs 6,600 crore from government that will enable it to pay interest on fleet acquisition and to meet other expenses.

Last month, the government had informed parliament that Kingfisher Airlines has an outstanding loan of about Rs 6,419 crore, and the lenders include SBI, IDBI Bank, Punjab National Bank, Bank of India and Bank of Baroda.

SBI recently termed the cash-strapped Kingfisher Airlines' a non-performing asset, while Bank of India said its loan to the carrier was 'sub-standard'.

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