Chennai, Feb 18 (TruthDive): Five banks have asked Director General of Civil aviation (DGCA) not to give permission to the Paramount Airways based here to fly again as it owes Rs 550 crores.
M.Thiagarajan the owner of Paramount Airways, headquarter in Chennai, stopped services in 2010 as it ran into losses. According to the letter from IDBI it had given loan of Rs50.42 lakh based on fund and non-fund-based working capital in 2006. It has claimed first charge on Paramount current assets says Chief recovery manager IDBI Bank in the letter. Other State owned lenders and bankers who had loaned Paramount Airways are Central Bank of India (Rs.30 crore), Indian Bank (Rs.31.5 crore), Andhra Bank (Rs.41.5 crore), Bank of India (Rs.227.5 crore) and SBI (Rs.84.8 crore). The total exposure of Paramount to all the lenders is Rs.550 crore.
Thiagarajan applied in January to DGCA for being airborne again and showed a revival plan. He was operating Embraer aircraft. This airline was predominant player in the South and was one of the few airways that connected Chennai to smaller towns of TamilNadu. There were rumours that the airlines was funded by a member of the Karunanidhi family. Maran’s have a major share in Spice Jet.
Hindustan Petroleum too joined the bandwagon of lenders who have written to DGCA stating that it has filed civil and criminal case against Paramount in Chennai court for not paying the fuel bills. Paramount was operational for three years with five ATR aircraft’s on lease. An engine malfunction led to an aircraft getting grounded and the airlines refused to pay the lease. The lessor wrote to DGCA and the regulator de-registered the aircraft’s. The dispute moved to an International court and in November last it was awarded Rs1600 crore as compensation. In January 2013 the money was deposited in the airways bank. Armed with this it moved the DGCA with a revival plan. It also started recruiting pilots, cabin crew and engineers. The present letter from banks and oil PSU is a hindrance.
Sources say that with only ten days for Budget the banks have been told to tighten the screws on the big guns who are not paying.