Germany's DVB Bank SE said it may repossess two Airbus A320 aircraft from troubled Kingfisher Airlines Ltd if the carrier failed to meet its commitment to the lender in due time.
The cash-strapped carrier, controlled by liquor baron Vijay Mallya, is having trouble making interest payments and paying salaries.
"It is a painful situation, it requires a lot of time and work," Bertrand Grabowski, a member of the board at the bank which oversees the aviation business, told Reuters on Friday. "We have said to Vijay (Mallya) that we cannot continue like this. If we are not paid on due time, we will certainly consider repossession of the aircraft," he said, while declining to comment if there was a certain deadline the bank had set.
“DVB has purportedly said they may repossess two aircraft if we do not pay them as agreed. Kingfisher Airlines fully intends to honour its payment obligations to DVB and other lessors,'' a Kingfisher spokesperson said
Grabowski said the amount of loan DVB has extended to Kingfisher was not significant to its $10-billion aviation portfolio and said the carrier is the only problem that DVB had in its aviation balance sheet.
14/01/12 Business Standard
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