Kingfisher Airlines agrees to pay up dues to BPCL
05 November 2009
The Vijay Mallya-promoted Kingfisher Airlines has resolved its long-pending aviation turbine fuel (ATF) payment dispute with state-owned Bharat Petroleum Corp Ltd through an out-of-court settlement, the companies informed the Bombay High Court today.
The airline will pay Rs40 crore within 12 days and the rest in instalments within a year. The total dues are Rs314 crore and the airline will also pay interest on this, said a BPCL official. However, the down payment and instalment amount was not immediately known.
The airline was not getting any supply from BPCL for the past six months due to non-payment of dues.
BPCL had petitioned the high court to appoint an arbitrator to resolve the issue after Kingfisher failed to clear its dues of Rs314 crore, including Rs 290 crore as principal amount. Kingfisher had on 8 October offered the oil company a payment of Rs10 crore every month as a settlement arrangement, but this was turned down by BPCL.
With the new settlement, Kingfisher can expect a resumption of fuel from BPCL, the country's largest supplier of ATF.