Mallya claims all set to seal $370 million deal: report

London: Reiterating an earlier claim that he was working hard to secure working capital loans from banks and equity infusion from investors, Vijay Mallya, chairman of Kingfisher Airlines, said Friday he was close to sealing a $370 million deal with an Indian private investor and a consortium of banks. He made his claim in an interview with a newspaper.

According to Mallya, he was nearing a deal with a consortium of 14 banks, led by state-owned State Bank of India, that would provide the perennially loss-making carrier with working capital of Rs600 crore ($118 million).

Mallya also told the paper he was finalising a separate $250 million equity injection from an unnamed wealthy Indian investor to recapitalise the cash-strapped carrier.

The deal with the banks, he said, would help reduce the interest rate which the airline is currently paying on its Rs7,500 crore ($1.4 billion) debt pile.

Kingfisher reported its sixteenth straight quarter of losses this week. It has never made a profit.

The airline cancelled hundreds of flights from the start of this month claiming it was reconfiguring aircraft to adhere to another business model. Industry sources said it was more likely because the carrier has been put on a cash-and-carry basis by vendors as it was unable to pay bills and even has had its cheques bounce.

The cancellations caused great hardship to air commuters who had to pay exorbitant premium to other carriers to continue their journeys.