BPCL to return to court on Kingfisher fuel bills

State-run Bharat Petroleum Corporation Ltd (BPCL) will shortly file an execution petition against Vijay Mallya’s Kingfisher Airlines (KFA) to claim jet fuel dues, a company official said.

KFA owes BPCL Rs 220 crore (after adjustment of interest). KFA’s deadline to pay expired on November 30.

BPCL had, in November 2009, sued KFA in the high court here, to get at Rs 300 crore of dues. It also withdrew credit, saying KFA could lift fuel only after paying cash on delivery. Later, in an out-of-court settlement with KFA, BPCL granted it a year’s time to pay the dues, including interest.

While a BPCL spokesperson declined to comment, calling it an issue between supplier and the customer, a company official said filing of the execution petition was the only way to make KFA pay.

“KFA did approach us, seeking more time. But we have already given them enough time. KFA is requesting us to defer the case as they may pay us through the money they raise from the GDR (global depository receipts) issue they are planning,” a senior BPCL official said.

A KFA spokesperson said, “We do not comment on supplier-related information.”

KFA Chairman Vijay Mallya had said last month the company would launch a $250-million (Rs 1,130 crore) GDR issue shortly and was in the process of restructuring its debt with a consortium of bankers.

The company plans to convert about 30 per cent of the total debt into capital and had passed a resolution to so convert Rs 735 crore of loans.

Once the debt restructuring was completed, Kingfisher would immediately launch the GDR issue, Mallya had said. Adding: “We are going to be in the US next week with some preliminary road shows. We have already met a whole bunch of investors in the US, Europe, Hong Kong and Singapore...All of whom have expressed strong interest in investing in Kingfisher.”