KINGFISHER Airlines said on Tuesday (December 11) it was in talks with Abu Dhabi’s Etihad Airways and other investors about buying a stake in the ailing Indian carrier.
But Kingfisher denied a deal had already been reached with Etihad after a report said the Abu Dhabi carrier had agreed to buy a 48-per cent stake in the Indian airline for $553m (£343.27m).
The Indian carrier “is in discussion with various investors, including Etihad Airways, for equity investments in the company,” the debt-laden carrier owned by liquor baron Vijay Mallya said in a statement.
“However no agreement has been reached either with Etihad or any other airline and the matters are merely at a negotiation stage,” the airline said.
The report in the Mumbai Mirror, which cited unnamed sources at the two airlines, was the most recent in a string about potential tie-ups between Indian and foreign carriers.
It came a week after Etihad was reported to be looking at Jet Airways, India’s biggest airline by market share.
Kingfisher shares climbed nearly five per cent on Tuesday on the Mirror report.
Etihad chief executive James Hogan told an Indian TV channel last week that the carrier was in talks in India about the possibility of adding to its foreign holdings, which include stakes in Virgin Australia and Aer Lingus.
But Indian aviation analysts expressed doubt that Etihad would be interested in Bangalore-based Kingfisher given its debt estimated at $2.5bn (£1.55bn) by the Centre for Asia Pacific Aviation (CAPA), a Singapore-based consultancy.
“Given its debt, without restructuring, it’s very unlikely anybody – a private equity investor or a foreign carrier – would buy into Kingfisher,” one aviation analyst for a major Mumbai brokerage who asked not to be named told reporters.
The airline has had its licence suspended by the Indian regulator until it comes up with a “viable” revival plan and is facing eviction from Mumbai airport for non-payment of parking and navigation charges.
