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UB Group May Use Money From Stake Sale To Diageo For Kingfisher Airlines

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UB Group, the parent of debt-laden Kingfisher Airlines, said it was in talks with lenders to the carrier to cut their exposure by using proceeds from a stake sale in a group company to Diageo Plc.
The statement comes days after lenders to Kingfisher said they would move ahead towards recovering $1.4 billion of loans in default after the company failed to come up with a viable funding plan.
UK drinks group Diageo agreed last November to buy a 53.4 per cent stake in UB Group-controlled United Spirits Ltd for $2.1 billion under a two-stage process.
Kingfisher, which has been stripped of its flying licence and has not flown since October, owes an estimated $2.5 billion to banks, staff, airports and oil companies.Since November 2011, the airline's fleet of 64 aircraft has come down to 38, none of which are airworthy.
According to sources at aviation regulator DGCA's office, 11 aircraft of the debt-laden airline were deregistered and taken back by lessors over 2012, with the last one deregistered on December 28, 2012.
DGCA sources say other aircraft lessors are desperate to reclaim their aircraft but cannot do so as the airline has cannibalised them, rendering them non-airworthy.
"Lessors are waiting for the remaining planes to get back into serviceable shape before taking them back. If they had the choice, they would have already done it," officials at the Directorate General of Civil Aviation told ET.