Vijay Mallya in New Delhi on Monday. Picture by Rajesh Kumar

New Delhi, Nov. 9: Kingfisher Airlines plans to raise up to $600 million, or about Rs 2,700 crore, through a mix of private equity placements, rights issues and global depository receipts.

“Negotiations are at an advanced stage with private equity investors. Current discussions are for $400 million,” Kingfisher Airlines chairman Vijay Mallya told newspersons on the sidelines of the India Economic Summit, organised by the World Economic Forum and CII.

The company has received shareholders’ approval to raise $100 million through a rights issue and another $100 million through global depository receipts. The floats will be completed by the end of the fiscal, Mallya said.

The airline, which has hit a rough patch because of the economic slowdown and a steep hike in jet fuel prices, needs money to repay debt and fund its fleet acquisition plans.

“I have confirmed that we are raising money. I will certainly use a large part of that to reduce debt,” Mallya said.

Kingfisher and other airlines have been pushing for greater FDI in aviation.

An inter-ministry meeting, chaired by the cabinet secretary, is likely to be held on the issue.

However, Mallya and other industry captains are not hopeful of a quick decision on increasing the FDI limit.

Foreign investment in aviation is capped at 49 per cent, but foreign airlines and airports are barred from picking up stakes in Indian airlines.

Last year, Mallya had suggested that foreign airlines be allowed to buy up to 25 per cent in Indian carriers. Jet and Air India, however, are against the move as it will invite competition from the small players who may join hands with foreign airlines.

Aviation industry analyst Sudipto Bose said even if the government opened up the sector to foreign investment, “there is a little chance of western airlines coming here given their own financial problems”.