Breweries Holding Ltd from immediately clearing the outstanding Rs 602.05
crore owed by Kingfisher Airlines against supply of ATF. At an special
meting convened on Tuesday, the HPCL board gave three months to UBHL to
clear the debt owed by its subsidiary Kingfisher and move to a
cash-and-carry scheme from July 1.
Earlier this month, the petroleum ministry had asked state-run HPCL to call
a special board meeting and invoke UBHL’s corporate guarantee on behalf of
Kingfisher. UBHL had issued a corporate guarantee of Rs 500 crore that
matures end-March 2011.
It had asked HPCL to place Kingfisher immediately on cash-and-carry terms
as is done by other state-run firms — Indian Oil Corp and Bharat Petroleum
Corporation Ltd — since early 2009. But the HPCL board felt that the airline
was recovering from the downturn and argued that it would be able to
partially repay the debt in the next three months with Rs 250 crore kept
outstanding as a bank guarantee instead of corporate guarantee.
It cited a recent payment of Rs 50 crore and a pledge by Kingfisher to pay
another Rs 50 crore by April 10 to convince the government and non-official
directors to wait awhile before pulling the reins. As per the board’s
decision, Kingfisher would be asked to pay more each month so as to adjust
half of the received money towards outstanding dues and half towards current
ATF supplies. Kingfisher buys nearly Rs 115 crore worth of ATF from HPCL
each month.
http://www.indianexpress.com/news/ub-holding-gets-breather-to-clear-k...
http://oneclick.indiatimes.com/article/074i1Zn0stdYV?q=Kingfisher+Air...
HPCL asked to invoke corporate guarantee against KingfisherSPECIAL
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The Petroleum and Natural Gas Ministry has asked Hindustan Petroleum
Corporation Ltd. (HPCL) to invoke the corporate guarantee given by the Vijay
Mallya's United Breweries (UB) Group to recover dues pending against
Kingfisher Airlines and supply aviation turbine fuel (ATF) in future only
against a bank guarantee.
In a letter to HPCL, the Ministry has asked the company to convene a
‘special board meeting' to consider among other things invoking UB Group's
Rs.250-crore corporate guarantee to recover part of Rs.602.05-crore
outstanding. The outstandings were reported to be Rs.602.05 crore on March 4
with a security in the form of Rs.250 crore corporate guarantee from United
Breweries and Holding Ltd (UBHL),'' the letter states. It asked HPCL to
place KFA on cash-and-carry terms as is done by Indian Oil Corporation and
Bharat Petroleum Corporation. Petroleum Ministry sources said normally ATF
supplies like any other fuel sold in bulk were done against a bank guarantee
to cover for the credit period. However, in the case of KFA, HPCL did not
insist on a bank guarantee and settled for a corporate guarantee, which the
Ministry felt, mighty be a worthless piece of paper that might not be
encashed in case of default, the sources said. UBHL had last week issued a
corporate guarantee of Rs.500-crore but the Ministry was unimpressed and was
insisting on a bank guarantee. The Ministry also wants HPCL to adjust 50 per
cent of the money received from KFA in future towards outstanding dues and
50 per cent towards current ATF supplies.
http://beta.thehindu.com/business/companies/article304773.ece
Enquiry HPCL by CVC Zee News 05042010.mp4
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