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Debt-laden Kingfisher Airlines’ promoter Vijay Mallya today said his company was in talks with foreign carriers for a possible stake-sale. Mr Mallya has been scrambling to raise funds for his ailing Kingfisher Airlines for nearly a year now. Kingfisher has about $1.4 billion of debt (Rs. 7,462 crore; $1 = Rs. 53.5).

Foreign airlines can now own 49 per cent in domestic carriers after the government changed foreign direct investment (FDI) rules earlier this month. No airline has publicly expressed an interest in taking a stake in Kingfisher Airlines so far.

"FDI in aviation came only ten days back... We are making all efforts to recapitalise with partners. Domestic investors are showing more excitement because foreign carriers have shown interest in investing," Mr Mallya said.

Shares in the company traded 4 per cent higher at Rs. 14.95 on the BSE today.

Kingfisher’s lenders have been putting pressure on Mr Mallya to bring in capital to revive the carrier. The airline, which was until last year India’s number two airlines by domestic market share, is now the smallest among the six main airlines after grounding most of its fleet.
 
"Every airline is struggling so it was prudent to cut back capacity to contain losses. It is absolutely untrue that we are flying only seven aircrafts. We have forty aircrafts and we are looking for recapitalisation to put the remaining 25 aircrafts back in air," Mr Mallya said in response to a report in a local daily today, which said Kingfisher’s fleet has shrunk from 66 in October last year to just seven.
 
Mr Mallya also said that he had regular meetings with KFA banking consortium. The promoters have infused Rs. 1,154 crore in the carrier since April 2012, Mr Mallya said at the Kingfisher Airlines annual general meeting.

"We will make a presentation before the consortium tomorrow," Mr Mallya said.

He also said that he has not violated listing norms.

"(Vijay) Mallya is keen to keep control of Kingfisher... So the sense we have from him is that he is willing to do everything possible, including big sacrifices," SBI chairman Pratip Chaudhuri had earlier said.

SBI has the maximum exposure to the airline at Rs. 1,400 crore. As many as 17 banks, led by SBI, have an exposure of more than Rs. 7,000 crore in advances to the carrier, which has not serviced its debt since January and has not paid salaries since March 2012, forcing its pilots and engineers to strike several times in the past five months.