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Posted on Dec 11, 04:44PM | IBNS
Gulf based airline Etihad Airways is likely to buy 48 per cent stake in cash strapped Indian private carrier Kingfisher Airlines, media reports said on Tuesday.
Reports in Mumbai Mirror said Etihad could buy the stake for a little over Rs 3000 crore.
According to a report in Mumbai Mirror, "the deal's official announcement is likely to come around December 18, Mallya's 57th birthday, when he has organised a big bash at his sea-side Kingfisher Villa in Goa."
The Mumbai based paper 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," it said according to the paper, but both airlines have not yet officially confirmed it.
Kingfisher has hit turbulent weather over its financial condition and was unable to pay its employees for months.
The private carrier received a blow on Oct 20 when the aviation regulator Directorate General of Civil Aviation (DGCA) suspended its flying licence.
The DGCA suspended the flying license of the private carrier "until it comes out with a revival plan."
The operations of the private carrier were under suspension since Sept 30 due to strike by its employees.
The employees of the Kingfisher Airlines were often striking time and again over the issue of non-payment of salaries this year.
Kingfisher had reported a loss of Rs. 1,151.50 crore in the March quarter.
It has a debt of over Rs. 7,500 crore and accumulated losses which are almost equal.
Kingfisher Airlines controlled by Mallya has neither been able to pay salaries regularly since February nor has it managed to pay its dues to oil companies and airports.