NEW DELHI, Dec 13 (Reuters) - India's Kingfisher Airlines
Ltd, in stake sale talks with Abu Dhabi's Etihad
Airways and other investors, has capped foreign portfolio
investment in the company at 3 percent, carving space for a
foreign investor to buy as much as 46 percent of the embattled
India allows foreign investment of up to 49 percent in local
carriers. Overseas institutional investors currently hold 2.46
percent of Kingfisher, according to stock exchange data.
Cash- and debt-strapped Kingfisher, which was once India's
No. 2 airline by domestic market share but has grounded its
fleet since the start of October, said earlier this week it was
in talks with Etihad Airways and other investors about taking a
The decision to limit FII investment was taken "with a view
to keeping the company's capital structure in readiness for
transactions that may be identified in the future for the
benefit of all stakeholders of the company," Kingfisher said in
a statement on Thursday.
Kingfisher, controlled by liquor tycoon Vijay Mallya, has
been trying for more than a year to find an investor, without
success. It is saddled with $2.5 billion in debt, according to
A fresh cash infusion into the struggling carrier could come
from a financial or strategic, Indian or non-resident investor,
Kingfisher said on Thursday.
Shares of the company have rallied recently and were up 5
percent - their daily limit - for the third consecutive day on
Thursday. The shares, which were trading at 17.15 rupees in
early trade, have recovered sharply from their all-time low of
7.05 rupees hit in August.
(Reporting by Anurag Kotoky; Editing by Chris Gallagher)