Kingfisher shares up after report of Etihad stake deal
Shares in India's troubled Kingfisher Airlines were up nearly five % on Tuesday after a newspaper report that Abu Dhabi's carrier Etihad Airways is set to buy a 48 % stake.india Updated: Dec 11, 2012 12:09 IST
Shares in India's troubled Kingfisher Airlines were up nearly five % on Tuesday after a newspaper report that Abu Dhabi's carrier Etihad Airways is set to buy a 48 % stake.
The Mumbai Mirror report, citing unnamed sources in the two airlines, said an official announcement was expected around December 18, the birthday of Kingfisher's flamboyant boss Vijay Mallya.
The deal is worth more than Rs. 30 billion $553 million), the newspaper said.
Kingfisher shares were up 4.96 % at Rs. 15.67 in morning trading on the Bombay Stock Exchange.
Mallya has been desperately seeking a buyer from abroad to save his airline from collapse since the government in September allowed foreign airlines to purchase stakes of up to 49 % in domestic carriers.
The debt-ridden airline, named after Mallya's biggest beer brand, has been struggling to survive, owing billions of dollars in taxes and payments to suppliers, lenders and employees.
The carrier's staff ended a strike in late October over unpaid wages but Kingfisher's fleet has remained grounded after India's airline industry regulator suspended its licence.
The watchdog has said it will not lift the suspension until Kingfisher comes up with a "viable" revival plan.
Etihad, which carried 8.3 million passengers in 2011, already holds stakes in Virgin Australia, Air Berlin, Air Seychelles and Aer Lingus.
It has also reportedly been looking at buying a stake in India's Jet Airways.
The Mumbai Mirror said Etihad would buy the Kingfisher stake in two installments: 30 % this month and another 18 % by August next year, after cracking the deal last week in Abu Dhabi.
A spokesman for Kingfisher refused to comment on the report.