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And now Etihad is looking at Kingfisher, instead of Jet as was reported earlier last month. For now, the turmoil and uncertainty in India skies will continue.
Kingfisher Airlines, the Indian carrier that halted flights because of a cash crunch, said Etihad Airways is among possible investors it’s talking to as it seeks to raise funds though a stake sale.
Discussions are only at the “negotiation stages” and no agreement has been reached with Abu Dhabi-based Etihad or any other airline, the Bangalore-based carrier said in a filing today. It didn’t name any other potential investors or give further details on the talks. Etihad declined to comment.
Kingfisher, which grounded flights in October, jumped by its 5 percent daily limit in Mumbai trading today after Mumbai Mirror newspaper said Etihad had agreed to buy a 48 percent stake. The Indian carrier’s chairman, liquor tycoon Vijay Mallya, has been trying to raise capital for more than two years to help ease an 86 billion-rupee ($1.6 billion) debt pile.
Etihad is in due diligence with a “couple” of Indian carriers, Chief Executive Officer James Hogan said last week in an interview. The carrier already has stakes in Virgin Australia Holdings Ltd., Aer Lingus Group Plc and Air Berlin Plc.
The airline is in talks to buy as much as 24 percent of Jet Airways (India) Ltd., the nation’s biggest listed carrier, an Indian government official said earlier this month. Jet may raise about 16 billion rupees from the sale, said the official, who declined to be identified citing rules.
Etihad agreed to purchase the Kingfisher stake for more than 30 billion rupees, Mirror newspaper reported today, citing airlines’ officials it didn’t identify. That’s more than double Kingfisher’s market value. A deal may be announced around Dec. 18, Mallya’s birthday, according to the report.
Kingfisher closed in Mumbai trading at 15.60 rupees, the highest since Sept. 28. The stock has slumped 26 percent this year.
Kingfisher also needs funds to convince India’s aviation regulator to re-active its license, which was suspended following the service disruptions in October.
–With assistance from Stefania Bianchi in Dubai and Neil Denslow in Hong Kong. Editors: Vipin V. Nair, Neil Denslow
To contact the reporter on this story: Niveditha Ravi in Mumbai at firstname.lastname@example.org
To contact the editor responsible for this story: Neil Denslow at email@example.com