With some of its bank accounts being ‘de-frozen', Kingfisher Airlines will now be able to clear some of its income and service tax dues.
Bankers belonging to the lending consortium told Business Line that the airline would make partial payments to the tax departments in a day or two. “The company would be making the balance payment in the coming days,” a banker said.
According to him, Kingfisher Airlines could also manage to “standardize its account if it manages to make the total critical arrears payment of Rs 882 crore” by March 31, 2012.
Though the critical amount “was supposed to have been brought in by February, the account will become standard for all banks if the company manages to pay the critical arrears amount by March 31,” he said.
The banking consortium has a total exposure of over Rs 7,000 crore, of which Rs 4,000 crore is in the form of term loans.
Another banker said that it was not clear how the airline would make these payments, as they are yet to infuse fresh equity and also reduce the debt component. “Depending on bank debts alone would not help them tide over their current problems,” he said.
The company is yet to come up with a viable business plan, added the banker. In case the company fails to make the critical payment, then banks would have to provide for the non-performing asset.
Besides a villa, the company's corporate office, two helicopters and ATR aircraft, the biggest hypothecation from the airline was its Kingfisher brand, which was valued at Rs 4,000 crore. “The brand value is not as high now,” said the banker.