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The stock of debt-laden Kingfisher Airlines surged on the bourses on hopes that the Diageo-United Spirits deal would revive the carrier.
The stock hit its upper circuit in the afternoon session and closed at Rs 13.53, up 4.97 per cent on the Bombay Stock Exchange (BSE).
In an announcement made on Friday afternoon, Diageo confirmed that it will be acquiring 53.4 per cent of Vijay Mallya-promoted United Spirits.
“The promoters have sold 19.3 per cent of their stake in United Spirits. There is hope that some part of this money will flow to revive Kingfisher,” said Sharan Lilaney, aviation analyst, Angel Broking. Earlier in the day, Mallya had been quoted saying that all his businesses were independent of each other and that there would never be a “cross contamination.”
However, he said that the needs of Kingfisher Airlines would also be addressed. This would be done separately for the “good of the company and its stakeholders.”
The Directorate General of Civil Aviation had suspended Kingfisher Airlines’ licence after it failed to come up with a viable financial revival plan. Over the last month, the stock has fallen to Rs 12 from Rs 15 at the beginning of October. The United Spirits stock closed at Rs 1,359, up 1.22 per cent on the BSE.
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