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Vijay Mallya's Kingfisher Airlines is grounded
The carrier, which is controlled by Indian drinks entrepreneur Vijay Mallya, said it was cancelling serveral flights yesterday, but senior officials at Indias aviation regulator told Reuters that all flights had been grounded.
Shares fell 5pc on the news, the most possible in a single day on the Indian stock exchange.
Indian rules dictate that airlines must operate at least five planes in order to maintain their aviation licence. Kingfisher had already grounded some of its planes earlier this year.
A section of employees of Kingfisher Airlines has not been reporting for work over the last fortnight and over the past two days, they have been threatening and even manhandling the other employees who are reporting for work, a Kingfisher spokesman said.
The company, which is weighed down by around 80bn rupees (£950m) of debt, and is reported to be behind on its tax and fuel bills as well as payments to workers.
Bankers have already rejected Kingfishers requests for a loan of 200 rupees and it is thought that Mr Mallya will be forced to sell part of his 28pc stake in the successful drinks firm, United Breweries, in order to prop up the beleaguered airline business.
Rival drinks giant, Diageo, is in talks with United Spirits and was said on Friday to be close to agreeing a deal that would boost Diageos exposure to the lucrative Indian drinks sector.
Mr Mallya, who is also behind Formula Ones Force India team, last week sought to dampen speculation he is desperate for cash by claiming he is in discussion with several foreign carriers over a potential sale of a stake in Kingfisher.
Vijay Mallya's Kingfisher Airlines is grounded - Telegraph
The carrier, which is controlled by Indian drinks entrepreneur Vijay Mallya, said it was cancelling serveral flights yesterday, but senior officials at Indias aviation regulator told Reuters that all flights had been grounded.
Shares fell 5pc on the news, the most possible in a single day on the Indian stock exchange.
Indian rules dictate that airlines must operate at least five planes in order to maintain their aviation licence. Kingfisher had already grounded some of its planes earlier this year.
A section of employees of Kingfisher Airlines has not been reporting for work over the last fortnight and over the past two days, they have been threatening and even manhandling the other employees who are reporting for work, a Kingfisher spokesman said.
The company, which is weighed down by around 80bn rupees (£950m) of debt, and is reported to be behind on its tax and fuel bills as well as payments to workers.
Bankers have already rejected Kingfishers requests for a loan of 200 rupees and it is thought that Mr Mallya will be forced to sell part of his 28pc stake in the successful drinks firm, United Breweries, in order to prop up the beleaguered airline business.
Rival drinks giant, Diageo, is in talks with United Spirits and was said on Friday to be close to agreeing a deal that would boost Diageos exposure to the lucrative Indian drinks sector.
Mr Mallya, who is also behind Formula Ones Force India team, last week sought to dampen speculation he is desperate for cash by claiming he is in discussion with several foreign carriers over a potential sale of a stake in Kingfisher.
Vijay Mallya's Kingfisher Airlines is grounded - Telegraph
