Kingfisher plans 25% stake sale

Mumbai/Bangalore: Vijay Mallya's Kingfisher Airlines is holding exploratory talks with international carriers for diluting up to 25% stake. The move comes as the Centre is reportedly planning a policy change to allow foreign airlines to invest in domestic carriers with a cap of just below 26%, sources said.
Kingfisher is believed to be discussing stake sale with three foreign airlines — British Airways, Singapore Airlines and Virgin — as a strategic investment is expected to fetch better valuation compared to the numbers indicated by PE investors.
Kingfisher Airlines chairman Vijay Mallya told ET : “I have received several expressions of interest from foreign airlines as the Kingfisher network is unparalleled. However, I cannot share details.” British Airways, Virgin Airlines and Singapore Airlines could not be contacted on the weekend, but it must be mentioned that interest from some of these airlines is not yet a formal one.
This is because there is no clarity on when the government may permit the foreign airlines to hold equity in their Indian peers although the Indian companies, including Mr Mallya, have been asking for the permission for quite some time.
Sources said the foreign airlines were interested in a minority investment for now, which will lead to sharing of infrastructure and will help in better aggregation of passengers on international routes.
Kingfisher and Jet have been trying to raise $300-400 million for sometime now. Both have seen their equity raising plans shelved several times in the past 12 months, as they desist diluting stake at depressed valuations. It is believed that Mr Mallya is not keen on selling equity at a valuation lower than $1 billion.
17/11/08 Mithun Roy & Boby Kurian/Economic Times

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Categories: Foreign Nov 2008, Kingfisher Nov 2008, New Nov 2008