Mallya, Sahara refute striking any bailout deal

Lucknow: The presence of Vijay Mallya, chairman of Kingfisher airlines, here Sunday triggered speculation about a possible deal between him and the Sahara Group to bail out the beleaguered airlines.

Reports to this effect were promptly refuted by both sides. "The limited purpose for which I am here is Sahara Force India," Mallya told PTI referring to the board meeting of the new set up. "There is absolutely nothing like it," he said when asked whether he was in talks with Sahara chief Subroto Roy for pumping in money into his cash-strapped Kingfisher.

Sahara India`s corporate head Abhijit Sarkar also described the reports as "incorrect". "There is no agreement and there are absolutely no talks on such issues. Mallya is in Lucknow to attend the board meeting of Sahara Force India," he said.

Ahead of last month`s inaugural Indian Grand Prix, the Sahara group and Mallya have got together. The Sahara Group had bought 42.5 per cent stake, worth $100 million, in the Vijay Mallya owned Force India F1 team, which was re-christened as Sahara Force India.

With banks asking Kingfisher Airlines promoters to infuse fresh equity worth Rs 800 to Rs.1,000 crore, Mallya is in talks with various investors and high net worth individuals to raise the capital.

In continuation of efforts to raise funds for airlines, Mallya and top officials had a couple of days ago held discussions with the State Bank of India officials.

The SBI is leading the 13 bank consortium, which is funding the cash strapped airlines. Earlier this week, 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.