Vijay Mallya, who controls 58% of Kingfisher, told ‘The Times’ that he had secured provisional approval from the Indian government for a change in the law that would ease restrictions on foreign ownership of airlines. He claimed that the foreign carriers, which he refused to identify, stood ready to invest as soon as the change was announced—possibly within days
London: Kingfisher Airlines, owned by Indian liquor baron Vijay Mallya, is in talks with two foreign carriers, including International Airlines Group (IAG)—the owner of British Airways and Iberia—for a potential rescue package, reports PTI.
This could pave the way for IAG to take a minority stake in the troubled Indian airline, a report by ‘The Times’ said.
Mr Mallya, who controls 58% of Kingfisher, told ‘The Times’ that he had secured provisional approval from the Indian government for a change in the law that would ease restrictions on foreign ownership of airlines.
He claimed that the foreign carriers, which he refused to identify, stood ready to invest as soon as the change was announced—possibly within days.
It would allow overseas airlines to own up to 49% of an Indian airline for the first time.
Mr Mallya expressed confidence that a deal with a “foreign strategic investor” was likely.
The report quoting a financial source in Mumbai named one of the airlines involved as IAG.
Etihad, the UAE-based airline, is also keen to have discussed a tie-up, which would involve the foreign groups providing equity in exchange for a minority stake.
Kingfisher which has debts of Rs6,300 crore ($810 million), needs an immediate cash injection of up to $160 million to remain solvent, the report said.
Its fleet of aircraft has fallen to 28 from 64 and many of its pilots have deserted because they have not been paid.
Last night, IAG, according to the report, welcomed the possibility of a liberalisation of India’s aviation industry but said that it was “too early to speculate about IAG’s interest in any Indian airline at this stage.”
Etihad said: “We talk regularly and frequently to many airlines about issues and opportunities.”
Kingfisher Airlines, which has not turned a profit since it was formed in 2005, has been hit hard by a combination of rising fuel prices, high taxes in India and a falling rupee.
The company’s auditor has raised questions about its financial viability without any infusion of cash, the report said.
According to the report rapid economic growth and a booming economy make India an attractive market for airlines.
Some sources cautioned, though, that Kingfisher’s financial condition was so poor that IAG and Etihad could be reluctant to get involved.
In a further sign of the financial strains on his business, Mr Mallya said that he was considering the sale of a stake in Whyte & Mackay as part of a drive to cut his group’s $4 billion (2.5 billion pounds) debt.
Mr Mallya said that Consolidated USL, his spirits holding group which has debts of $1.68 billion, was considering the sale of a 49% stake in Whyte & Mackay (W&M), the Glasgow-based whisky maker which he bought in 2007 for $1.2 billion.
The report also quoted Ravi Nedungadi, the chief financial officer of Mr Mallya’s parent company, UB Group, saying that there had been interest from “a number of private equity players” in W&M, which owns single malt whisky brands such as Jura and Dalmore.
He said that UB Group would retain ownership of 51% and that the proceeds would be used to cut USL’s debt and to help fund an expansion drive, including the construction of new distilleries and India’s biggest glass plant.
Kaushik Basu, Chief Economic Advisor, ministry of finance, said: “We are serious about this (sugar decontrol). Many countries like Brazil have really flourished and we want this to happen in India”
New Delhi: An expert committee on sugar decontrol is likely to submit report in the next six months, reports PTI quoting prime minister’s economic advisory panel chairman C Rangarajan.
In January, prime minister Manmohan Singh had formed an expert committee, under the chairmanship of C Rangarajan, to examine issues related to decontrolling of the sugar sector.
“I think we are meeting after one month again. In the next six months, we hope to submit the report. This is a preliminary meeting, we discussed various issues facing sugar sector,” Mr Rangarajan told reporters after the meeting.
On the deliberation in the meeting, Kaushik Basu, Chief Economic Advisor, ministry of finance, said: “We are serious about this (sugar decontrol). Many countries like Brazil have really flourished and we want this to happen in India”.
Apart from Mr Rangarajan and Kaushik Basu, the members of the committee include secretaries to the Department of Food and Agriculture, Agricultural Costs and Prices (CACP) chairman Ashok Gulati, former agriculture secretary Nand Kumar and KP Krishnan, secretary EAC.
“Shared feeling is that potential of this sector has not been realised in India. We will write a serious report. I am keeping my fingers crossed, things will happen,” Mr Basu noted.
The sugar industry is under government control, right from the level of production to distribution.
The apex sugar industry bodies ISMA and NFCSF are seeking partial decontrol of the sector, including freedom to sell sugar in the open market and doing away with the levy obligation for the Public Distribution System (PDS).
Under the levy obligation, sugar mills are required to sell 10% of their output to the government at below-cost rates for supply to ration shops. Mills supply levy sugar at 60% of the cost of production, resulting in an annual industry loss of about Rs 2,500-Rs3,000 crore.
The industry has also been demanding removal of the monthly release system under which food ministry allocates quantity of sugar to be sold in the open market every month.
Sugar production in India, the world’s second largest producer but the largest consumer, is estimated to touch 26 million tonnes as against the annual demand of 22 million tonnes.
“By 2030 China and India will be the world’s largest and third largest economies and energy consumers, jointly accounting for about 35% of the global population, gross domestic product (GDP) and energy demand,” BP’s chief economist Christof Ruhl said releasing BP’s Energy Outlook 2030
New Delhi: India will be the world’s third largest economy by 2030 but its energy demand will slow down to 4.5%, reports PTI quoting global energy giant BP plc.
“By 2030 China and India will be the world’s largest and third largest economies and energy consumers, jointly accounting for about 35% of the global population, gross domestic product (GDP) and energy demand,” BP’s chief economist Christof Ruhl said releasing BP’s Energy Outlook 2030.
There would be “no surge in energy demand as India industrialises. Demand growth slows to 4.5% per annum (against 5.5% p.a. in 1999-2010) as improvements in energy efficiency partly offset the energy needs of industrialisation and infrastructure expansion.”
India’s dependence on imports to meet its gas needs will jump to 47% by 2030 while the same for oil will grow to 91%. The nation will be 40% dependent on imports to meet its coal needs.
He said India remains on a lower path of energy intensity; by 2030 it consumes only about half the energy that China consumes today, at a similar income per capita level as in China today.
Over the next 20 years China and India combined account for all the net increase in global coal demand, 94% of net oil demand growth, 30% of gas, and 48% of the net growth in non-fossil fuels.
Coal remains the main commercial fuel, but its share falls from 70% to 55% in China as a result of maturing industrial structure and from 53% to 50% in India due to domestic resource constraints.
Oil’s share is flat at 18% in China and falls to 26% in India, constrained by prices and growing import dependency. Gas gains market share along with nuclear and renewables in both countries, BP said.
In India, the share of industry continues to grow, as infrastructure development catches up and manufacturing expands to absorb a growing labour force, but it never reaches the Chinese level. “India therefore remains significantly less energy intensive, with a relatively high share of the service sector in GDP.”