Three state-owned banks seek Rs 193 crore paid to Airbus, but it failed to delivery aircraft to Kingfisher and held back funds
Lenders to Kingfisher Airlines have written to the ministries of civil aviation and defence to restrain payments due to Airbus, the commercial arm of aerospace firm Airbus Group NV, after the company failed to deliver aircraft as promised to the defunct airline and held back funds.
The aviation company had borrowed Rs 193 crore from three banks to make the Pre-delivery Payment (PDP) to Airbus. Though Airbus is in receipt of the money, it failed to deliver the planes to the now-grounded Kingfisher Airlines promoted by Vijaya Mallya.
Airbus had stated that it has withdrawn orders for 10 Jumbo A 380 and A 350 planes by grounded Kingfisher Airlines saying that the company may not need the planes. It was around this time the airline had stopped flying and its promoter Vijay Mallya was toying with the idea of selling the airline to some investors who Mallya said were interested in the airline.
Banks now claim that the Rs 193 crore that Kingfisher paid is due to the banks and Airbus needs to pay it back. A detailed questionnaire sent to Airbus seeking their stand on the issue was unanswered.
The three banks that chipped in Rs 193 crore are Oriental Bank of Commerce, Corporation Bank and United Bank of India.
The banks have already filed a case against Airbus with the Debt Recovery Tribunal (DRT) Bangalore, which had passed restraint order against Airbus
A senior banker of the consortium said,"We have given money to Airbus on behalf of Kingfisher Airlines. Airbus admitted to court that it has received the money but did not deliver the aircraft. Airbus should rightfully return the money to the company."
A contempt application was filed by a consortium of 17 banks in the Karnataka High Court on Thursday against Mallya, Kingfisher Airlines and United Breweries Holdings for allegedly violating an undertaking given to the DRT that they would not alienate unencumbered assets nor deal with them. But Mallya had gone ahead and created pledges in violation.
The banks in the meantime are going ahead with the recovery process of attaching properties of the company. A consortium of 17 banks, having debt outstanding of close to Rs 7,000 crore to the grounded airline, has initiated recovery proceedings under the available legal avenues using the underlining securities which they had. The securities included shares in multiple group companies and real estate, including private properties of the liquor baron.
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