USL-Diageo deal: Mallya says KFA is separate issue

Moneycontrol Bureau

After announcing a majority stake sale in United Spirits (USL) for about USD 2 billion to Diageo, chairman Vijay Mallya put aside all speculations about where he will use proceeds coming from the deal.

On whether the proceeds of the stake sale will be used for easing financial difficulties at Kingfisher Airlines (KFA), Mallya said, "KFA is a separate issue." He further said that he cannot divulge all details regarding where he will use the money he gets from Diageo.

Earlier it was speculated that the amount coming from this deal will be partly used to retire KFA's debt. The airline, which has suspended operations since a month now needs to infuse equity into the airline or else it licence can be cancelled by the Directorate General of Civil Aviation (DGCA).

Even a consortium of banks who have lend around Rs 8,000 crore to the airline have given an ultimatum to the latter to inject funds or else face their wrath.