The deal will help Mr Mallya reduce United Spirits' debts and free up funds for his embattled Kingfisher Airline.
Mallya may very well be one of the most beloved and popular billionaire businessmen in India, but his status has done nothing to help keep Kingfisher Airline solvent.
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"Given the sheer size of India and its booming economy it should be on the Formula One calendar, " declared Dr Vijay Mallya, Kingfisher airline and beer tycoon, and owner of the Force India F1 team.
Kingfisher Airline has been in crisis mode for more than a year, losing vast amounts of money and seeing its market share crumble to the single digits after being closer to 20 percent of the Indian domestic airline market.
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Further up the rankings is Force India which is co-owned by Vijay Mallya, chairman of the grounded airline Kingfisher, and Sahara, an Indian conglomerate.
To save his ailing airline, Kingfisher, he might have to sell huge stakes in his successful beverage giant, United Breweries.
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Kingfisher employees have taken the airline to court, asking the company to be placed into bankruptcy, its assets sold to pay off eight months of back pay owed to numerous employees.
He is known for his United Breweries, a beverage behemoth that owns the Kingfisher beer brand, for which his airline is named and branded after.
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Kingfisher, once India's most luxurious airline, cancelled all its flights since Oct. 1, 2012, after its employees went on strike over pay.
Kingfisher owner Vijay Mallya is struggling to keep the airline afloat and has pledged personal and UB Group assets as collateral against the loans.
For a time, Kingfisher was the young, party, good life airline.
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As many as 30 Kingfisher captains are in the job market after their airline, owned by liquor baron Vijay Mallya, was grounded in October amid mounting debt.
Its white knight, Etihad Airways of the United Arab Emirates, seems to have found a new airline to court in the form of Kingfisher rival Jet Airways.
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As many as 30 Kingfisher captains are in the job market after their airline was grounded in October as the carrier, owned by liquor baron Vijay Mallya, failed to keep flights going because of mounting debt.
Mallya and his management team at Kingfisher have been unable to devise an acceptable plan to keep the airline in business.
Mallya also runs the profitable United Breweries Group (NSE: UBHOLDINGS), owners of the popular Kingfisher beer label, so he has plenty of money to fund the airline.
Kingfisher, the world's only Skytrax Five Star-ranked domestic airline (now also with flights to and from London, Dubai, Hong, Bangkok, Kathmandu and Singapore) makes life easy for those who do not have time to take India's scenic, but time-consuming trains.
Best known for such brands as Kingfisher, also the name of his lossmaking 18-month-old domestic airline.
ATR's big order from Kingfisher seems to have gone pear-shaped in recent weeks as the Indian airline's financial troubles have worsened.
He also said the bank isn't "interested" in Kingfisher's revival plan any more as it has given time to the airline to repay debt.
Kingfisher, controlled by liquor baron Vijay Mallya, was once India's second biggest airline but has reported annual losses for five years in a row.
Kingfisher, owned by Vijay Mallya, was hit by a strike in July - the airline was forced to cancel 40 flights when workers refused to work saying they had not been paid for months.
Before it suspended flights, the airline had been cannibalizing planes for spare parts because it ran out of funds, Kingfisher engineers said.
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Kingfisher, grounded since Oct. 1 because of a cash crunch, had also lost its airline license after it failed to produce an operational plan to the government.
Barring a sudden change of heart from Mallya, who seems unable to save this airline by tapping assets from his United Breweries Holding company, it is hard to see how Kingfisher Airlines survives the year.
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The airline at this point has become bad publicity for the United Breweriers beer brand of the same name, Kingfisher.
The fresh funding is good news for the airline whose shares--like those of rivals--Jet Airways (India) Ltd. and Kingfisher Airlines Ltd.
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