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After pushing the Government to allow foreign airlines to invest in domestic airlines and seeking a debt recast from banks, debt-ridden Kingfisher Airlines may be looking for investment from China.
Hong Kong-based private equity firm, Bravia Capital is said to be eyeing an investment in Kingfisher Airlines.
When contacted, a spokesperson for the airline merely said, ‘no comments'. And e-mails sent to Bravia Capital remained unanswered.
Government sources said that there were no restrictions on investments from China, including Hong Kong, in any airline in India.
If the deal does go through, it will not be a first for Bravia Capital in the aviation sector. In October this year, Bravia Capital and HNA Group acquired Istanbul-based ACT Airlines. The size of the deal has not been made public.
The HNA Group is into various businesses, including airlines, airports, finance, property and tourism. The group's Web site says that Hainan Airlines is a leading company in the air transport business of the HNA Group.
The airline covers 100 destinations around the world with over 500 flights a week. As on end-October, the airline had 109 aircraft, including 94 Boeing 737s , three Boeing 767s, nine A-330s and three A-340s. According to its 2010 annual report, it has 7,959 employees.
China effect
In October, Bravia Capital put out a white paper titled ‘The China effect: How Chinese capital is impacting aviation industry'.
The paper states thus: “We see the opportunities in the aviation industry for Chinese ODI to be bifurcated between distressed opportunities in developed markets (primarily airlines and airport investments) and opportunities to develop infrastructure and support Chinese-trade routes in emerging markets such as South-East Asia, India, Africa and across the Middle-East.”
Bravia has been actively eying India acquisitions for some time now. Last year, there was a buzz that it had invested $40 million in SpiceJet. It also has a joint venture with IL&FS for aircraft leasing in India.
Kingfisher Airlines, which has accumulated debt of over Rs 7,200 crore, saw its losses more than double to Rs 469 crore in the quarter ended September this year.
The airline had posted a loss of Rs 231 crore during the corresponding period in the previous year. In 2010-11, the airline incurred a loss of Rs 1,027 crore .
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