Kingfisher Airlines said on Tuesday it was in talks with Abu Dhabi's Etihad Airways and other investors about taking a stake in the grounded and indebted Indian carrier.
Kingfisher shares rose near to their daily limit of 5 percent after a local newspaper reported that Etihad was close to buying a 48 percent stake in the carrier for a little over INR30 billion rupees.
"We would like to clarify that the company is in discussion with various investors, including Etihad Airways, for equity investments in the company," Kingfisher said in a statement.
It gave no further details as to the possible size of the stake or the price anyone would pay. Etihad Airways declined comment.
A formal announcement of a deal could come around December 18, the birthday of its flamboyant chairman Vijay Mallya, according to the Mumbai Mirror, a tabloid known mainly for coverage of local news. It did not say how it got the information.
Etihad would initially buy a 30 percent Kingfisher stake in December and a further 18 percent by next August, the newspaper said.
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