Kingfisher loses six more planes, says in talks with investors

Dec 11 2012, 21:43 IST
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The airline owes around Rs 190 crore to Service Tax Department, of which Rs 127 crore are under litigation.  (Reuters) The airline owes around Rs 190 crore to Service Tax Department, of which Rs 127 crore are under litigation. (Reuters)
SummaryThe airline owes around Rs 190 crore to Service Tax Department, of which Rs 127 crore are under litigation.

Kingfisher Airlines lost six more aircraft due to non-payment of lease rentals and tax dues even as the beleaguered carrier said today it was in talks with Gulf-based Etihad Airways and various investors for infusion of equity.

Amid reports of a revival plan before the month-end, the airlines' troubles compounded further with a US-based leasing company taking back four of its Airbus planes following non-payment of lease rentals. Sources said the aircraft are now parked at the Mumbai airport.

Besides, the service tax department confiscated two planes from the grounded carrier in the last one week for defaulting on tax dues. One of them was impounded today, Mumbai Service Tax Commissioner S K Solanki said.

The Vijay Mallya-owned carrier came out with a clarification on a possible stake sale following media reports that it is all set to sign a deal with Etihad to sell 48 per cent stake for Rs 3,000 crore.

"We would like to clarify that the company is in discussions with various investors, including Etihad Airways, for equity investments," Kingfisher said in a filing to BSE.

"However, no agreement has been reached either with Etihad or any other airline and the matters are merely at negotiation stages," the statement said.

Reacting to the media report, the market lapped up Kingfisher stock that closed on the BSE at Rs 15.67, up 5 per cent--the maximum it can move in a day as per the exchange norms. The airline has a market capitalisation of Rs 1,267.23 crore as of today.

Coupled with tax arrears and vendor dues, the airline has over Rs 10,000 crore in accumulated losses, besides Rs 7,000 crore it owes to 17 banks, which the company has not serviced since January.

Etihad Airways, in an email reply to query on reports of its plan to buy stake in Kingfisher Airlines, said the carrier has identified equity investments in other airlines as an important evolution of its partnership strategy.

In a statement in the night, Kingfisher said the detention of aircraft by tax authorities was "illegal and untenable."

The airline owes around Rs 190 crore to the Service Tax Department, of which Rs 127 crore is under litigation.

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