Will cash-strapped Kingfisher Airlines finally get a lifeline?

In continuation of efforts to raise funds for the troubled Kingfisher Airlines, its chairman Vijay Mallya and top officials held discussions with an Indian private investor and a consortium of banks that might improve the financial state of the airline.

Vijay Mallya is believed to be in a process of sealing a 370 million dollar deal with an Indian private investor and a consortium of banks to bailout Kingfisher Airlines.

PERSPECTIVE: Kingfisher and what ails Indian aviation

The meeting that took place on Friday, in which Mallya, UB Group Chief Financial Officer Ravi Nedungadi and Kingfisher CEO Sanjay Agarwal, were present, is understood to have taken place at the SBI headquarters in Mumbai.

Televsion channel Headlines Today quoted Financial Times, where in Mallya has said that he was nearing a deal with 14 banks led by the State Bank of India that would provide the loss-making carrier with working capital of Rs 6 billion or $118 million.

RIL denies Kingfisher stake-buy reports

The head of the UB Group also said he was finalising a 250 million dollar equity injection from an unnamed wealthy Indian individual to recapitalise the cash-strapped carrier.

Mallya is also said to be in a process to conclude a deal with the banks to reduce the interest rate which the airline is currently paying on its 1.4 billion dollar debt pile.

IN DEPTH: No short-term solution for over-ambitious Kingfisher

Meanwhile, shares of Kingfisher Airlines slumped by as much as 18 per cent but pared losses later on Friday at the Bombay Stock Exchange.

Earlier this week, Mallya told Headlines Today that a private investor was keen in investing in Kingfisher Airlines.

The airline reported that its losses doubled in the September quarter on account of high fuel costs and cancelled several flights over the past few weeks.

After announcing the results, Mallya had said that the airline has sought help from banks to raise short-term funds to the tune of Rs 700-800 crore as working capital, interest concession, and also ruled out its closure.

He also said that the company plans to raise Rs 2,000 crore through rights issue and is seeking government approval for direct import of jet fuel to reduce fuel costs.

Kingfisher Airlines has been in the focus in the last few days for flight cancellations, cash shortages, and survival fears. 

With inputs from Headlines Today