of talks, fuelling a push by the world's biggest spirits group into fast-growing markets.
United Spirits and Mallya's group company United Breweries Holdings will get about half of the sum. Sources said the bulk of this will be used to pare United Spirits' debt and release its shares, which were pledged by its founders to raise loans.
Mallya may infuse some of the proceeds into Kingfisher to pay staff salaries, airport fees and fuel bills to make it airworthy again, said investment banking sources and analysts.
A Kingfisher spokesman did not respond to a request for comments.
RETURN SOME MONEY
Mallya, known for his lavish lifestyle and often referred to as India's Richard Branson, last week played down any link between the United Spirits deal and problems at his airline.
Kingfisher, which Mallya launched with much fanfare in 2005, was once India's second-largest airline by domestic market share. For most of this year, the carrier has struggled to pay its staff, and it has not flown since early October due to protests and safety concerns.
In the event of Kingfisher's demise, its creditors would hardly get anything back as India does not have a formal bankruptcy process. Analysts say they may be willing to find some middle ground, lured by the prospect of getting at least some of their money back after the airline resumes flying.
Lenders will meet with company senior executives later this month to discuss a turnaround plan, banking sources said.
When we see money in their hands we can always ask them to return some to us, a senior official with a state-run bank and one of Kingfisher lenders told Reuters, declining to say whether the bank would commit more money to the carrier.
Any decision to lend more to Kingfisher would be based on a fresh infusion of equity from its founders and a credible plan to revive the airline, State Bank of India's Chairman Pratip Chaudhuri said last week.
Few doubt Mallya's capacity to pull off another surprise, bringing in an investor to rescue the airline. He told Reuters last month that two investment bankers had been hired as part of a search for potential partners.
The timing of Mallya's deal with Diego does show some intent on Mallya's part to get the airline going, said Rajan Mehra, the India head of U.S.-based private jet operator Universal Aviation, and an aviation expert.
And if some Middle East airline decides to put its muscle behind him, with all