Still owes hundreds of crores to OMCs
Despite Vijay Mallya claiming this week that his Kingfisher Airlines (KFA) did not have any overdue with oil marketing companies, Bharat Petroleum Corporation (BPCL) is mulling legal options if the airline does not pay Rs 241 crore in jet fuel dues by November.
“Market conditions have improved and we are hopeful that KFA will pay us our dues before November,” a BPCL senior executive told Business Standard.
In 2008, the government had given six months to KFA to pay its dues in time but it failed to do so. BPCL had, in November 2009, sued KFA in the Bombay High Court to get Rs 300 crore. It also withdrew credit facility to KFA, saying it could lift fuel only after paying cash at the time of delivery.
BPCL and KFA then reached an out-of-court settlement, where KFA was granted a year’s time to pay, including interest. Between November 2009 and last month, KFA paid Rs 120 crore to BPCL. Its deadline to pay the remaining Rs 241 crore (after adjustment of interest) expires on November 30.
KFA also owes Rs 201 crore to state-owned Hindustan Petroleum Corporation (HPCL), said an HPCL official. “Supplier and partner relationships are confidential and we do not discuss them publicly,” said KFA’s spokespeRs on.
An HPCL executive told Business Standard that KFA has been paying its current bills but still owes Rs 201 crore. “The carrier is currently on a cash and carry basis with us. We have a Rs 500 crore corporate guarantee from the United Breweries (UB) Group (KFA’s parent) but we do not think we would be using that,” he said.
