Vijay Mallya, chairman and managing director of Kingfisher Airlines, at a conference on Aviation in India: Great Opportunities and Great Challenges, organised by the Confederation of Indian Industry, in New Delhi on Tuesday. (PTI)

New Delhi, Oct. 18: Kingfisher Airlines today said it was keen to pick up a stake in Air Sahara.

Kingfisher promoter Vijay Mallya expressed the airline’s willingness to pick up a stake worth $100 million in the carrier.

Air Sahara is estimated to be worth between $700 million and $1 billion. A $100 million investment would give the buyer 10-15 per cent of the airline’s equity.

“Air Sahara is raising equity. Obviously, we are among many who are interested. Ernst and Young has prepared an information memorandum. We are studying it,” Mallya said.

Air Sahara, India’s second-largest private carrier, had earlier said it was scouting for a private financial investor who could bring in funds to help buy more aircraft. “We are in talks with Asian and global equity funds ... our choice is a minority financial partner,” Sahara Air chief executive Rono Dutta told The Telegraph some time back.

He, however, had added that “airlines have been calling us and are keen to pick up a stake, though our preference would be to take on an equity fund partner”. However, he said “a domestic partner with (airline) alliances would also be an option”.

Aviation circles have long been abuzz with stories about how Jet, Kingfisher and later SpiceJet were trying to buy out control of Air Sahara using politicians as intermediaries since July this year. However, Sahara has consistently rubbished these rumours, contending that it was only selling a small stake and not controlling equity.

Jet Airways CEO Naresh Goyal, however, denied his airline was in the fray to pick up a stake in Sahara. “We have no interest in Air Sahara. It is wrong... We have enough on our platter to handle.” Kingfisher Airlines, however, admitted that it has received an initial offer letter from Ernst and Young, Air Sahara’s consultants.

Mallya made it clear that the Sahara offer was for just $100 million worth of equity. Bidders are expected to make non-binding offers against the memorandum by October 30.

Sahara said it needs to raise fresh capital to help fund a five-year business plan which includes fleet expansion. The fleet acquisition plans will leverage increase in domestic traffic as well as the international routes that have been allotted to it.

At present, the airline operates with a fleet of 26 leased aircraft to 25 destinations. It offers 123 flights daily to metro and non-metro cities across the country. Air Sahara says it is “in an expansion mode and by November will operate 140 flights a day”.

Jet defers US plans

Jet Airways has deferred its plans to fly to the US till next year due to lack of aircraft, even as it is all set to start operations to London from this month end.

“We don’t have plans to fly to the US at the moment though we have been designated by the Indian government to do so,” Goyal said here today.