Saturday, April 4, 2009

Kingfisher is top defaulter on fuel dues

Vijay Mallya Parties. We wondered where he is getting money to buy back Gandhi's Belongings and Frolicking with Miss Indias at GOA in new year. We have wondered how PSUs are USED as tools to SERVE Political Masters. We have always wondered how (pls someone tell me the exact %) 5% of people in INDIA hold on to 90% of wealth of this Country and why POOR remain Poor.. Well here is just one News item. Remember that Kingfisher owner is Rajya Sabha member and these people are powerful enough to make Govt Order PSUs to give what they want.


Kingfisher Airlines owed around Rs1,000 crore to IOC, BPCL and Hindustan Petroleum Corp. Ltd as of February
Tarun Shukla, Utpal Bhaskar and P.R. Sanjai

New Delhi / Mumbai: On Tuesday, the last day of the fiscal year gone by and the deadline for closing out dues to state-run oil firms who supply it jet fuel, Kingfisher Airlines Ltd, India’s largest carrier by passengers flown, missed making good the payments, ending fiscal 2009 with around Rs1,000 crore in arrears.

Airlines such as National Aviation Co. of India Ltd-run Air India and Jet Airways (India) Ltd, too, have missed some payments due to oil firms, but have dues much less than their bigger rival, said two executives at Indian Oil Corp. Ltd (IOC).

“There are some delays and defaults by different airlines. They have agreed to pay in April on different dates. While some have paid, Kingfisher did not pay us anything after their last payment. They have written to us recently asking us for an extension till 10 April,” said a senior IOC executive, who asked not to be identified.

Separately, Kingfisher Airlines also missed paying Airports Authority of India (AAI) dues of at least Rs150 crore over use of the airports run by the regulator, a senior government official said. The airline was to make this payment to bring its dues with limits of its bank guarantees furnished to AAI.

As the consequence of missing the deadline for oil dues, Bharat Petroleum Corp. Ltd (BPCL) has stopped selling jet fuel to Kingfisher Airlines on credit and instead moved to a so-called cash and carry arrangement, joining IOC in adopting a no-credit stance with the carrier, chaired and run by flamboyant millionaire Vijay Mallya.

The 31 March cut-off date was the sixth and last in a series of deadlines set out on 22 October, when the Union government allowed the country’s three largest carriers—Air India, Jet Airways and Kingfisher Airlines—to pay dues amounting to Rs2,962 crore over a period of six months to oil marketing firms.

The dues had accumulated and piled up, mostly in the first three quarters of 2008, as jet fuel prices scaled record highs through the year and peaked in August.

The staggered payment option was extended to the airlines, who had reported losses of a cumulative Rs2,888.13 crore in fiscal 2008. The deal, put together in the presence of oil minister Murli Deora and aviation minister Praful Patel, included fortnightly reviews of jet fuel prices instead of a monthly revision earlier, and offering a credit period of up to three months to help keep the airlines afloat.

But as the fiscal year came to an end, Kingfisher Airlines had not met its commitment, said a second IOC executive, who too asked not to be identified, even as Air India and Jet Airways had paid most of their dues by 31 March. It was not immediately clear how much these two carriers owed the firms.

Kingfisher Airlines owed around Rs1,000 crore to IOC, BPCL and Hindustan Petroleum Corp. Ltd as of February and there was no change, this executive added. Air India and Jet Airways have not paid interest on payments due, he added.

IOC, the country’s largest oil marketing firm, withdrew its credit facility to Kingfisher Airlines earlier this year, IOC chairman Sarthak Behuria had said in a 13 February interview. “I can only say that what you owe to me, you have to pay. If you don’t pay, you will be on (a) cash and carry basis,” he had said then.

Kingfisher Airlines, which has said it plans to raise $400 million (Rs2,012 crore), is now in talks with banks such as State Bank of India to raise up to Rs3,000 crore loans, said an executive with UB Group, of which the carrier is a part of, on condition of anonymity.

The deal, which is in the final stage of being signed, according to this executive, will help the airline meet its expenses and also help it pay its dues. Kingfisher is also trying to shore up funds from other private banks, he added.

Mallya on Thursday, when asked if his airline was in default of dues to oil firms, did not answer the specific question, instead telling reporters in Mumbai that all his aircraft were flying. Details of loans cannot be made public yet, he added. Kingfisher Airlines operates 400 daily flights with a fleet of 75 planes.

A spokesman for Kingfisher said the airline “does not wish to discuss or comment upon supplier relationships or banking arrangements” in response to emailed questions on dues.

Meanwhile, payment of interest on the dues continues to be a contentious issues between the airlines and the oil firms. The carriers say the issue was not discussed at the 22 October meeting with Deora, Patel, senior officials at both the oil and aviation ministries, and executives of the oil marketing firms, as also Mallya, Jet Airways executive director Saroj Dutta and Air India chairman and managing director Raghu Menon, in New Delhi.

Oil firms argue that is is understood that interest has to be paid on deferred payments.
On Thursday, senior officials at the aviation and oil ministries said they were not willing to intervene any more.

“It is for the oil marketing companies (OMCs) and the airlines to decide the issue. These are business decisions between them. The government had intervened when there were bad times for the airline industry. The time is different now,” said a top oil ministry official, who requested anonymity. “We have not been asked for any intervention in the matter by the OMCs.”
A senior civil aviation minister official, who asked not to be named, said it was a commercial issue that has to be dealt between two business entities.

Shares of Kingfisher Airlines rose 0.73% on the Bombay Stock Exchange to Rs34.55 each on a day the bourse’s benchmark index, the Sensex, surged 4.5%.

My dear Mr Vijay Mallya.. why do you not use your own funds on your Airlines instead of spending them on your women and drinks. Do please spare Public Money.

1 comment:

  1. There is famous saying in INDIA only industry becomes sick , not the industrialist, since most of the money is borrowed either from public, or public sector banks.He will feed some party to get into elite sabha and do networking with people in the same business and become prosper. Banks will either get sick or right off loan as bad debt.


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