Kingfisher Airlines pays up 10% of HPCL oil dues

Kingfisher Airlines paid Rs 63 crore — about 10% of the total dues — to Hindustan Petroleum Corporation (HPCL) on Thursday evening, just hours before the deadline to clear a part of the money it owes to the state-run oil marketer for jet fuel supply expired.
The Vijay Mallya-owned carrier paid up after the government threatened on March 13 to recover dues by invoking a surety of Rs 250 crore by Kingfisher’s parent firm United Breweries & Holding (UBHL) for fuel supply, said a senior HPCL executive. The oil company is yet to invoke the corporate guarantee, he said.
The payment will be reflected in HPCL’s balance sheet for the 2010-11 financial year. “We are in compliance with the credit terms, as mutually agreed with HPCL from time to time,” said a Kingfisher spokesperson.
Kingfisher still owes HPCL’s Rs 540 crore. The UB Group watchers said money for the payment came from the Rs 414-crore United Breweries raised by selling 10.27% in Aventis Pharma last month. Kingfisher Airlines shares were up by 0.5% at Rs 47, while HPCL shares were down by 0.74% at Rs 316 at the close on BSE on Thursday.
UBHL had issued another corporate guarantee of Rs 500 crore in the first week of March, but the oil ministry rejected the offer. Instead, it asked HPCL on March 17 to supply jet fuel only against a bank guarantee in future.
02/04/10 Sameer Hashmi/Economic Times

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Categories: Kingfisher Apr 2010