Khemkas To Offload 40% In Skyline Nepc

The Chennai-based Khemkas plan to offload up to 40 per cent of their equity in Skyline NEPC (earlier Damania Airways) to foreign institutional investors, individual strategic investors and non-resident Indians (NRIs) as part of a revival package for their airline operations.

The Khemkas also propose to hawk four Fokker aircraft, merge NEPC-India Ltds airline division with Skyline NEPC and pay a part of the Rs 5 crore due to Customs authorities in instalments.

The Khemkas were forced to ground their entire fleet of nine Fokkers and five Boeings last month due to financial problems. They are now seeking funds to achieve their target of re-starting operations by August 1.

 

While $6 million (about Rs 21 crore) is required to get the entire fleet airborne again, about Rs 3 crore is needed to commence a skeletal service.

Speaking to Business Standard, group director Tirupathi Kumar Khemka revealed: We are already talking to a few foreign investors who can bail us out. We hope to start full operations by September 1 and part of the operations by August 1. However, Khemka said the revival would depend on the government allowing the group to pay part of its Inland Air Travel Tax dues in instalments.

Customs authorities had earlier impounded the NEPC groups aircraft following its failure to pay the tax.

The Union civil aviation ministry is understood to have already endorsed the Khemkas plan to pay off their dues in instalments. The civil aviation ministry has reportedly also written to the finance ministry, suggesting that such an exemption should be granted to the Khemkas.

The Khemkas present liabilities exceed Rs 50 crore, including dues worth Rs 20 crore to Indian Oil Corporation for fuel purchases. The Khemkas say the money which they owe to IOC is securitised against the assets of the company. They are now looking for a loan to bridge their liabilities and are ready to offer security against assets in the ratio of 1:2.

NEPC has also decided to sell four of its nine Fokkers following the shutting down of the aircraft company, which has made it difficult to source spare parts. The Khemkas hope to earn over Rs 20 crore through this deal, which will be ploughed back into reviving the company.

In order to woo investors and consolidate the airline business, the Khemkas are contemplating spinning off NEPC-Indias airline division and merging it with Skyline NEPC. The move would also ensure that the Khemkas would not have to give up any equity stake in group flagship NEPC India, which derives most of its turnover from selling windmills.

The NEPC group came into the limelight after acquiring the ailing Damania Airways from Mumbai-based industrialist Parvez Damania. The group then mounted a hostile takeover bid on the S K Modi-controlled ModiLuft. However, the subsequent grounding of ModiLuft and the financial problems of the Khemkas prevented them from pursuing the move further.