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Kingfisher Begins Talks with Air France-KLM for Stake Selling

Anurag Bhullar


With the government and Vijay Mallya exploring options for allowing Foreign Direct Investment in the aviation sector, there is information that Mallya had started preliminary negotiations with Air France-KLM for selling out 20-25 percent stake in the cash strapped Kingfisher Airlines.


Vijay Mallya is also seeking out a significant premium for the deal, valuing the airlines at billion dollars that is much higher than the value of its current market capitalization. Kingfisher has already leased the slots for its London operations from the French Carrier and there are chances of it joining SkyTeam Alliance with Air France-KLM as dominant partners.


The Indian Aviation Ministry on the other hand, is also thinking over the strategy of allowing foreign airlines a 26 percent stake directly within the 49 percent FDI window. This move will certainly help in diversifying and controlling the growing airlines sector losses that stands over a billion of dollars this financial year.

 
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