A
week after its lenders decided to recover their dues, cash-strapped Kingfisher
Airlines has started paying salaries to its employees, apart from approaching
the aviation regulator seeking licence renewal, sources said today. "Some
of us have received salary dues. Those in the lowest package, as well as some
engineers and pilots, have also got a month's salary dues," sources said.
The airline has not been
paying salary to its employees since May last year. It had started delaying
salaries much before the crisis broke out last October.
The sources also said the
airline’s Chief Executive Sanjay Agarwal is in New Delhi for a meeting with the
Directorate General of Civil Aviation (DGCA) to make a fresh request to resume
operations. However, these developments could not be officially confirmed.
Earlier in the day,
Kingfisher shares rose five per cent on the BSE, the maximum permissible limit
on a day, after one of its promoters, United Breweries Holdings, raised its
loan limit for the ailing carrier to Rs 750 crore from Rs 300 crore.
UB Holdings has sought
approval from its shareholders to revise the lending limit for Kingfisher and
to authorise its board of directors to take necessary action in this regard,
the company had said yesterday.
Reacting to the
development, shares of the company touched an intra-day high of Rs 10.53 on the
BSE, higher by five per cent from its previous closing price at 1230 hours.
"To accommodate
further lending to Kingfisher, if required, it is proposed to realign these
limits further by increasing the lending limit to KFA from Rs 300 crore to Rs
750 crore and reducing the investment limit from Rs 1,200 crore to Rs 750
crore, thus maintaining the overall limit of Rs 1,500 crore," UB Holdings
said in a shareholders' notice.
The revision was done to
facilitate the conversion of loans given to Kingfisher into
convertible/non-convertible securities, as required by the debt recast
agreement between the airline and a consortium of its lenders.
Last Tuesday, the lenders
to the airline, which number as many as 17 banks which together had extended Rs
7,000 crore 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.
The lenders’ consortium
leader State Bank, which has loan dues of Rs 1,700 crore, had said as a first
step, lenders would monetise the collaterals given to them from other group
companies like Mangalore Fertilisers and the flagship United Spirits, in which
54 per cent has been sold to the British spirits major, Diageo, for Rs 11,170
crore.
However, the UB Group has
denied that it had given USL shares as collaterals to the lenders as well as
the brand Kingfisher, which also covers its beer business. The bankers are
expecting to recover around Rs 1,000 crore from these securities before the end
of this fiscal itself.
Yesterday, SBI Chairman P
Chaudhuri had said in Chennai that he was hopeful of recovering a "good
portion of his Rs 1,700 crore dues from the airline."
AAI asks airline to pay Rs
390 crore in dues
Trouble never seems to end for Kingfisher
Airlines, with state-run Airports Authority of India today tightening the noose
saying it wanted a "firm commitment" from the grounded carrier for
clearance of 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 for a firm
commitment in that because so far, what they have committed could not be
honoured," AAI Chairman V P Aggarwal said in New Delhi. Replying to
questions, he said, "Though there is news that they are planning to
restart operations, there has not been any concrete proposal to us for dilution
of our dues."
"So far, the approach
was to revive the airline. But now we have decided to realise the securities
provided by the airline. Our endeavour is to recover the full amount,"
Choudhuri said. Noting that recovery of dues would be after completing a
"complicated, long, legal battle", he said the bank has made
provisions to collect Rs 1,650 crore of the Rs 1,700 crore through realisation
of securities.
The lenders also hope to
take only a small cut from the entire fiasco as they have collaterals
worth Rs 6,500 crore from group
companies, excluding the brand Kingfisher, which in good times was valued at Rs
4,200 crore.
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