Kochi: Cochin International Airport Limited (CIAL) and the Housing Development Corporation (HUDCO) have evolved a formula to end the long-pending dispute over loan repayment.
According to the formula, CIAL's entire loan burden would be cleared with HUDCO accepting the Rs 107.5 crore deposited by CIAL with the debt recovery tribunal (DRT), New Delhi as loan repayment. From this amount, HUDCO will spend Rs 10 crore to buy the airport company's shares, CIAL sources told TOI here.
The formula worked out after discussions between CIAL MD V J Kurien and HUDCO MD V P Baliga in New Delhi, will be implemented only if CIAL share holders' general body approves it. The CIAL management has convened a general body meeting on March 31 to discuss the proposed formula, sources said. If approved, HUDCO will be able to possess nearly 3% of CIAL shares. CIAL had availed Rs 143 crore from HUDCO during 1995-2000 in four tranches for constructing the airport.
It defaulted in repayment as its revenue was insufficient to service the loan after the airport started operation in 1999. CIAL started making profits in 2003, and its MD Kurien entered into a deal with HUDCO for loan repayment by fixing the consolidated outstanding as Rs 175 crore. The airport company then made a down payment of Rs 120 crore to HUDCO.
02/03/12 T Ramavarman/Times of India
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