Foreign airlines interested in 25% Kingfisher stake: Mallya
17 Nov 2008
New Delhi: Kingfisher Airlines owner Vijay Mallya has said he has been approached by international carriers for a stake in his airline, but said the government has to first lift restrictions on foreign shareholding in airlines. "Kingfisher can't sell 25 per cent to any airline until the government permits it," he told reporters on the sidelines of the India Economic Summit here.
Given the desperate need for carriers to raise funds not just for day-to-day operations, but also to meet payment schedules on aircraft orders, and given the sorry state of the equity markets, which prevents them from raising funds, carriers have been petitioning the government to reverse its stance on foreign holdings in Indian carriers.
Speaking to the media, Mallya said, "This is because they (carriers) will value much better, and in a more fair manner, than a pure equity investor."
"I have received several Expressions of Interest from foreign airlines as the Kingfisher network is unparallelled. However, I cannot give details."
He also said, "I have requested the government to allow foreign airlines to acquire up to 25 per cent... As I believe aviation should be treated as per international norms."
Under current policy, foreign direct investment (FDI) up to 100 per cent is allowed in other areas related to aviation, such as greenfield airports, cargo, maintenance, repair and overhaul facilities.
Kingfisher and Jet Airways linked up last month in an informal alliance aimed at reducing operational costs by sharing engineering, ticketing, ground handling and other services.
