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TPG, Blackstone, Cerberus eye Kingfisher Airlines stake

Reghu Balakrishnan & Aneesh Phadnis  |  Mumbai 

After W L Ross’ investment in SpiceJet, another major is likely in the debt-ridden Private equity majors interested in buyouts have started initial discussions with promoter Vijay Mallya. According to sources in the know, PE buyout majors such as TPG, and have shown interest.

The talks are in early stages. was likely to rope in a British airline for acquiring the Kingfisher stake, the sources said. The percentage of stake dilution in Kingfisher is not known.

Cerberus had acquired 3i Infotech’s US-based billing and payment unit for $137 million last year. In 2004, it had acquired a large stake in bankrupt Air Canada. is already engaged in talks with AMR, the bankrupt parent of American Airlines, to buy a majority stake.

A spokesperson said, “We are in discussions with potential investors.” Currently, the promoter and promoter group hold 50.51 per cent in the airline. and spokespersons declined to comment. An email to remained unanswered. Cerberus, named after the three-headed hound in Greek mythology that guards the gates of hell, is one of the largest of distressed asset buyers. It acquired the Air Canada stake in 2004 and also owns a stake in the Netherlands-based AerCap Aviation, a leading aircraft-leasing company. Cerberus had acquired 51 per cent stake in GMAC, the financing arm of General Motors, in 2004 for $7.4 billion.

Sushi Shyamal, partner, Ernst & Young Transaction Advisory Services, said, “Buyout funds may look at investing in if they have the flexibility to bring in new management. Typically, such funds want to take control of the firm and any buyout fund may not back the current management or may impose several conditions before investing.” In 2008, WL Ross, a turnaround player, had subscribed to convertible bonds worth $80 million in It exited the airline in 2010.

Mallya is also in talks with foreign airlines such as Etihad and British Airways to sell a stake once the government allows foreign airlines to invest in Indian carriers. CEO has reportedly said the promoters would be in a comfortable position even if 49 per cent holding was offloaded.

Kingfisher stocks went down 4.16 per cent on Monday to close at Rs 23.05 on the Bombay Stock Exchange.

First Published: Tue, March 06 2012. 00:33 IST