Kingfisher Bank Accounts May be Frozen Again

Mumbai: Indian authorities may freeze Kingfisher Airlines Ltd.'s bank accounts for a second time if it doesn't clear its unpaid service taxes by March 31, a top federal official said Thursday, signaling more trouble for the loss-making, cash-strapped carrier.
"The airline has told us the arrears will be cleared by March," said S.K. Goel, chairman of the Central Board of Excise and Customs.
Kingfisher paid 260 million rupees ($5.3 million) in service taxes in December and January, but it still owes another 700 million rupees, Goel told reporters earlier in the day.
A freeze on bank accounts would come as a fresh blow to the Vijay Mallya-owned airline, which is already struggling with rising losses and unpaid bills.
Banks have refused to lend additional money to the airline until it clears its interest payments, and at least two airplane leasing companies have warned they will repossess some aircraft.
Kingfisher is the worst-affected in an Indian aviation industry hit by high fuel costs and interest rates.
02/02/12 Prasanta Sahu & Anirban Chowdhury/Wall Street Journal

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Categories: Kingfisher Feb 2012