KFA collateral not enough to cover bank loan recovery
The troubled airline’s long-term borrowings alone amounted to Rs 5,695 crore, it says.
“The loans were secured by hypothecation of all movables assets of the company (both fixed and current) other than fixed assets acquired on hire purchase/lease basis and aircraft but including helicopters, all trade marks and goodwill of the company, all credit card receivables, IATA collections and other receivables of the company and mortgage of Kingfisher House,” the report says.
However, as the company has stopped operations, the security cover for banks doesn’t mean anything as there are no receivables or collections.
“In effect, the pledged assets may not be worth more than Rs 1,500 crore to Rs 2,000 crore,” said a banking source.
The company has also furnished non disposal undertakings in respect of aircraft taken on finance lease/hire purchase aircraft.
Its auditors report says estimated unpaid overdues to banks and institutions as at March 31, 2012 aggregated to Rs 797.74 crore including devolved guarantees/letters of credit unfunded. Interest aggregating to Rs 51.07 crore for the calendar year 2011 were due to debenture holders as at March 31, 2012.
As part of the
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