* Etihad eyeing 48 pct stake for over 30 bln rupees - report
* Deal could be announced next week - report
* Kingfisher has $2.5 bln debt, grounded since October
(Adds Kingfisher, analyst comments, details)
By Anurag Kotoky
NEW DELHI, Dec 11 (Reuters) - Kingfisher Airlines
said on Tuesday it was in talks with Abu Dhabi's Etihad Airways
and other investors about taking a stake in the grounded and
indebted Indian carrier.
Kingfisher shares rose near to their daily limit of 5
percent after a local newspaper reported that Etihad was close
to buying a 48 percent stake in the carrier, controlled by its
flamboyant chairman Vijay Mallya, for a little over 30 billion
rupees ($550 million).
"We would like to clarify that the company is in discussion
with various investors, including Etihad Airways, for equity
investments in the company," Kingfisher said in a statement.
It gave no further details as to the possible size of the
stake or the price anyone would pay. Etihad Airways declined
A formal announcement of a deal could come around Dec. 18,
the birthday of Mallya, according to the Mumbai Mirror, a
tabloid known mainly for coverage of local news. It did not say
how it got the information.
Kingfisher has been trying for more than a year to find an
investor, with no foreign carrier publicly expressing an
interest in taking a stake.
Battling stiff competition and high operating costs, Indian
carriers have been in talks to sell minority stakes to foreign
airlines. Etihad has been eyeing a stake in Jet Airways
, India's largest airline by total passengers carried, a
source said recently.
"I do not think any foreign airline would be interested in
Kingfisher unless promoters infuse money into the company, at
least 40-50 billion rupees," said Rashesh Shah, an aviation
analyst with ICICI Securities, who has suspended coverage of the
Industry expert Rajan Mehra, the India head of U.S.-based
private jet operator Universal Aviation, said an Etihad
investment in Kingfisher was possible.
But he said the reported price sounded high and Etihad would
not want to take on all of Kingfisher's debt.
Its total debt is estimated at roughly $2.5 billion,
according to the Centre for Asia Pacific Aviation consultancy.
Kingfisher's market value is about $231 million.
"They can get an airline which is in a mess, which can be
bought at a reasonable price, and which gives them access to the
captive domestic market," said Mehra, who previously headed
Qatar Airways' India operations.
Abu Dhabi-based Etihad would initially buy a 30 percent
Kingfisher stake in December and a further 18 percent by next
August, the newspaper said.
Kingfisher, once India's second-largest airline by domestic
market share, has struggled to pay staff for much of this year
and has not flown since early October due to staff protests and
Kingfisher's often-volatile shares closed up 4.7 percent,
effectively at their 5 percent daily limit, at 15.60 rupees on
Tuesday. They have more than doubled since hitting an all-time
low of 7.05 rupees in August.
($1 = 54.5150 Indian rupees)
(Additional reporting by Stanley Carvalho in Abu Dhabi; Editing
by Matthew Tostevin)