Kingfisher fails to pay rent, asked to vacate Mumbai offices

Mumbai: Two real estate developers have served eviction notices to Vijay Mallya-promoted Kingfisher Airlines for allegedly defaulting on rent payments on a Mumbai property since November 2011.

Airline sources confirmed the development and said the management is negotiating with the developers to resolve the deadlock.

"Senior airlines representatives are in talks with some of the developers for quite some time now to resolve the deadlock and arrive at a solution," Kingfisher Airlines sources said.

The airline has an estimated debt burden of over Rs 7,000 crore, and accumulated losses of Rs 6,400 crore

The cash-strapped airline has a rented property in the Andheri (East) suburb of Mumbai, from where it runs part of its operations, while the main administrative office is located at Kingfisher House, which is owned by the company.

The airline’s spokesperson was not available for comment.

The notices by Mumbai-based developers – Samruddha Realtors and Dhruvam Realtors – are understood to have been served on April 11 through their lawyers, giving Kingfisher Airlines a month's time to vacate the Andheri (East) space held by the airline.

Kingfisher has been struggling for nearly a year and has been defaulting on payments. The airline has an estimated debt burden of over Rs 7,000 crore, and accumulated losses of Rs 6,400 crore.

On Thursday, Civil Aviation Minister Ajit Singh informed Parliament that the embattled airline owes Rs 272.5 crore to the Airports Authority of India.

Struggling to keep flying after the Income Tax and Service Tax departments froze its bank accounts earlier this year, the airline has been forced to sharply cut operations - it has shut down operations at a number of destinations, and has reduced its fleet size to 16.

It bank accounts were later unlocked after it made part payments to tax authorities. In early April, after employees threatened to strike work, the company also paid employees, many of whom had not received wages for months.

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