Vijay Mallya owned Kingfisher Airlines has landed in fresh trouble with Singapore based DVB Aviation Finance Asia Ltd , a subsidiary of Germany’s DVB Bank, suing the airline in the British courts for defaulting to the payment of aircraft rentals. The Singapore based company had leased two Airbus 320 aircraft to Kingfisher Airlines in 2006. The suit was filed on 16th July and will be heard by the Queen’s Bench division’s commercial court. A source from DVB Aviation, who did not want to be named, said the suit has been filed after the airline failed to pay dues for the last three months. These payments are made on monthly basis. The DVB Aviation official said the aircraft are still deployed with Kingfisher Airlines and they have not yet asked the airline to return the aircraft.
This is not the first time when Kingfisher Airlines finds itself in trouble for non-payment of dues. The company has oil dues of around Rs 484 crores which it owes to state run firm Hindustan Petroleum Corp Limited (HPCL). HPCL has asked for a bank guarantee from UB group has threatened to take the airline to the court if it does not clear dues by July-end.
The airline has run into problems with its bankers too with IDBI Bank recalling a Rs 900 crore loan in May this year. But after Mallya paid the short term Rs 150 crore loan, its other Rs 750 crore loan was rolled over.
Kingfisher Airlines wants to raise $250 million via a global depository rights issue. A rights issue by the promoters or a QIP (qualified institutional placement) is also being planned. This is part of a bigger $400 million fund raising exercise the airline has been planning for a while. SBI Caps is advising the ailing Kingfisher to restructure its Rs 7,413-crore debt (as on December 2009). Earlier, RBI had shot down SBI’s proposal to recast Kingfisher’s Rs 2,099 crore short-term debt. The remaining amount is long-term debt.
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