India's UB Group says in talks with Kingfisher lenders to cut debt

NEW DELHI Fri Feb 15, 2013 3:13am EST

NEW DELHI Feb 15 (Reuters) - India's UB Group, the parent of debt-laden Kingfisher Airlines, said it was in talks with lenders to the carrier to cut their exposure by using proceeds from a stake sale in a group company to Diageo Plc .

The statement comes days after lenders to Kingfisher said they would move ahead towards recovering $1.4 billion of loans in default after the company failed to come up with a viable funding plan.

UK drinks group Diageo agreed last November to buy a 53.4 percent stake in UB Group-controlled United Spirits Ltd for $2.1 billion under a two-stage process.

Kingfisher, which has been stripped of its flying licence and has not flown since October, owes an estimated $2.5 billion to banks, staff, airports and oil companies. (Reporting by Anurag Kotoky)