In a order on the winding up petitions filed by several creditors against ModiLuft, the court said that the company has to give a mutually agreeable payment schedule to its creditors.

The court has estimated that the dues payable by ModiLuft are to the tune of Rs 28 crore which should be paid to the creditors in a pre-set schedule.

In its submission to the court, the company has agreed that it will not ask for any extension of time for payment due to various companies. According to ModiLuft officials, the company has given a payment schedule to its creditors.

The list of 28 creditors includes oil companies which had been supplying air turbine fuel to the airline, Hotel Corporation of India and Air UK.

The company officials said that the court is satisfied with the submissions made by the company. It the judgment the court has stated that "the company has an honest intention of repaying the entire amount with interest, and to demonstrate their bonafide, the company shall deposit about 25 per cent of the total admitted amount which is about Rs 7 crore with the registrar of the court," said a senior ModiLuft official.

The company is raising fresh capital from the overseas market and part of this would go towards payment of dues. However, the major portion would be used to relaunch operations. The balance payment to creditors would be made once the airline restarts the services, said the officials.

The officials said the court order has been forwarded to all the creditors those are party to the wounding up petition. These, however, are free to approach the court in four weeks. The next hearing is scheduled in the first week of January next year.

ModiLuft airline which discontinued operation over three years ago has been trying to relaunch services since then. However, a large liability of the cash-strapped company had been one of the major stumbling blocks in raising funds.

The company, however, has finalised the relaunch programme with assistance from Speedwing, a wholly-owned subsidiary of British Airways. The business plan prepared by the consultancy firm has suggested appointment of a professional management team.

Speedwing will also provide experts to manage key positions of the company to make the airline operational. As per the plans, ModiLuft will be back in the business by March next year with a new identity--Royal Airways.

The settlement of dispute is the pre-condition for the takeover of ModiLuft. This was stated by the new promoter of the airline Ajmal Khan, the non-resident Indian from Canada.

In a recent interview with The Financial Express, he had said "the infusion of fresh capital would take place only when we are satisfied that the pending disputes have reached a settlement stage."

This does not mean that the company has to clear the entire liability beforehand. However, a mutually acceptable payment schedule has to be drawn between the company and creditors. Khan, who will takeover as the chairman of the company, will hold around 20 per cent of the company's equity.

The money is being raised from overseas market through a recently launched holding company called Royal Holding Services (RHSL), co-promoted by Ajmal Khan. The company has already launched $17.5 million private placement programme. The balance will be raised through convertible preferential issue.

According to Khan, the airline will initially operate three Boeing 737-400 aircraft on dry lease. Subsequently, another three similar aircraft will be inducted in the fleet, he said. Over the next two years the airline will have a fleet of 12 aircraft.