Vijay Mallya in New Delhi on Tuesday. Picture by Prem Singh
New Delhi, March 5: UB Group chairman Vijay Mallya today said funds transfer from United Spirits to Kingfisher Airlines was on track, with the Competition Commission of India clearing the sale of a stake in the Indian liquor firm to UK-based Diageo.
Mallya today met finance minister P. Chidambaram to discuss his financial constraints. He had last month met law minister Ashwani Kumar to discuss ways to deal with his airline’s problems.
UB Group, the parent firm of Kingfisher, had said it was in talks with the lenders of the debt-laden carrier to cut their exposure by using the proceeds from the stake sale in United Spirits. The development followed the decision of lenders to recall their loans.
Kingfisher, which has over Rs 15,000 crore in debt, accumulated losses and other dues, has remained grounded since October 1 and its licence has expired on December 31.
The airline has yet to pay service tax, income tax and provident fund dues besides owing money to oil companies, lessors and the Airports Authority of India.
Kingfisher has suffered a net loss of Rs 755.17 crore for the third quarter ended December. The airline did not report any revenue for the quarter compared with Rs 1,367.71 crore in the year-ago period.
United Breweries is also in the eye of a storm with its auditors raising concerns over its exposure of Rs 13,500 crore to Kingfisher.
The government will make it easier for leasing and financial firms to take back planes used by Kingfisher.
Civil aviation ministry officials today said a decision had been taken to make the process of repossessing aircraft by leasing firms easier.
Director-general of civil aviation Arun Mishra said he hoped for an amicable solution of the issue between Kingfisher and the lessors. “We are always willing to help leasing firms. We are committed to a solution,” he said.
Earlier this year, US-based International Lease Finance Corp had sent a team to repossess planes from Kingfisher over unpaid bills. The planes remained stranded because of administrative hurdles.
Germany’s DVB Bank SE has also sued Kingfisher and the DGCA seeking deregistration of two aircraft funded by it and the permission to fly them out of India.