Mumbai, Dec 11/Nationalturk – The United Arab Emirates (UAE’s) national carrier Etihad Airways is all set to buy 48 per cent stake in Indian liquor baron Vijay Mallya’s debt-ridden Kingfisher Airlines, which has been grounded for over two months now.
According to a newspaper published from Indian business hub Mumbai, Etihad has reportedly agreed to buy 48 per cent stake in Kingfisher for a little over Rs 3,000 crore.
The official announcement in this regard is likely to be made around December 18, which will be Mallya’s 57th birthday.
Quoting sources, the newspaper reported that the deal will be closed in two installments. “Etihad will buy a 30 per cent stake this month and another 18 per cent by August next year”.
However, Etihad and Kingfisher have either refused to confirm or deny the stake sale talks.
It is pertinent to mention here Etihad has already bought three international airlines — Virgin Australia, Germany’s Air Berlin and a 40 per cent stake in Air Seychelles this year.
Media reports said that senior Etihad officials visited the Kingfisher offices across India in recent week. “A team of Etihad officials comprising members of its commercial and operations teams met with Kingfisher official in September and discussed the modalities”.
Sources said top officials of both the airlines met twice in Abu Dhabi. “The deal was cracked last week in Abu Dhabi”.
Kingfisher, according to industry sources, requires a minimum of Rs 3000 crore to fly again. It owes Rs 60-70 crore in salaries to employees, Rs 950 crore to oil companies, Rs 500 crore to airports and Rs 7,000 crore to a consortium of 17 banks led by the State Bank of India.
They said if Etihad infuses Rs 3,000 crore into the Kingfisher airline and brings to the table its own standing in the market, banks are likely to offer fresh loans to the troubled airline.
Kingfisher’s aircraft seized
According to media reports, Kingfisher Airlines suffered another jolt as one of its aircraft—a 62-seater ATR—has been seized by India’s Service Tax department for non-payment of dues.
“The airline has not paid service tax. A notice was served to the airline, which failed to secure the payment. Subsequently on Saturday last, an aircraft of Kingfisher Airlines was seized by Sales Tax department,” sources said.
Kingfisher Airlines owes over Rs. 1,000 crore in vendor and tax arrears and has to repay tax dues worth more than Rs. 200 crore to the Indian government.
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Faiz Ahmad / NationalTurk India Business News
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