Mallya gives Rs. 5,904 crore guarantee to Kingfisher lenders
Kingfisher Airlines Chairman Vijay Mallya gave guarantees worth Rs. 5,904 crore for the carrier’s loans and other liabilities in 2011-12, but did not get any commission for the same because of lenders’ opposition.
While guarantees given by Mr. Mallya fell from Rs. 6,156 crore in the previous year 2010-11, the guarantees provided by Kingfisher’s holding and associate companies rose from Rs. 8,863 crore to Rs. 8,926 crore in this period.
Mr. Mallya had got a commission of Rs. 51 crore for these guarantees in 2010-11, but the airline has said that payment of such commissions has been withdrawn after directions from the consortium of its lenders.
As per the company’s latest annual report 2011-12, sent to shareholders last evening ahead of their Annual General Meeting on September 26, the airline did not make any payments to Mr. Mallya during the fiscal.
On the other hand, remuneration paid to its CEO Sanjay Agarwal nearly doubled from Rs. 2.12 crore to Rs. 4.01 crore, although the total employee remuneration fell marginally by one per cent to Rs. 669.5 crore on account of lower headcount.
Kingfisher said its headcount fell by 1,651 people or 22 per cent to 5,696 persons in the last fiscal and the carrier is planning further measures for optimising its “human resources utilisation.”
Writing on behalf of the company’s board, Chairman Mallya said in the ‘Report of Directors for the year 2011-12’ that Kingfisher is working on a “holding pattern” basis with limited operation, pending policy changes.
“Due to the current situation, your company is operating as a “holding pattern” with limited operation, pending policy changes which are in the offing,” Mr. Mallya said.
In aviation parlance, an aircraft is said to follow ‘holding pattern’ when it makes several mid-air turns waiting for a clearance to land, or to avoid hitting other plane.
Kingfisher’s net loss more than doubled to Rs. 2,328 crore in 2011-12, from Rs. 1,027 crore in the previous year.
Its total long-term borrowings stood at Rs. 5,695 crore as on March 31, 2012, down from Rs. 6,306 crore a year ago.
Besides, it had short-term borrowings of Rs. 2,335 crore at the end of 2011-12, up from Rs. 604 crore as on March 31, 2011.
For these loans, the airline has used as security all its movable assets, trademarks, ‘goodwill’ of the company, credit card and other receivables and a mortgage on Kingfisher House.
The airline said the government is actively considering relaxing FDI norms to allow foreign airlines to pick up equity in domestic players, after representations made by it and other domestic carriers.
“This change in policy could provide your company with widened access to equity capital and potential to induct strategic partners,” the airline told its shareholders.
