Mallya springs a surprise

A section of employees of cash-strapped Kingfisher Airlines (KFA) were in for a surprise on Tuesday as the company started paying one month salary dues to the staff.

Added to this, the grounded airline’s shares were trading 5% higher at Rs 10.53 in the bourses after its promoters, United Breweries Holdings increased its loan limit to KFA from Rs 300 crore to Rs 750 crore.

Though there was no statement or assurance from KFA that the salary would be paid on Tuesday, a section of the employees received salary dues with mixed feelings. “We got one month’s pay today, but we do not know when the next installment will come,” an employee of the airline told Express.

Though group Chairman Vijay Mallya had assured employees of regular salaries  from October last year, the management has defaulted on their promises.

The salary dues coming barely a week after the lenders consortium threatening to start recovery process of the over Rs 7,000 crore unserviced loans to the airline. 

In the meantime, it was reported that the airline management also met with aviation regulatory body, the Directorate General of Civil Aviation (DGCA), for renewal of their Scheduled Operator’s Permit (SoP), which expired on December 31, 2012.

“To accommodate further lending to Kingfisher if required, it is proposed to realign these limits further by increasing the lending limit to KFA from Rs 300 crore to Rs 750 crore and reducing the investment limit from Rs 1,200 crore to Rs 750 crore, thus maintaining the overall limit of Rs 1,500 crore..,” the promoters said in their shareholders notice.