Vijay Mallya, the chairman of Kingfisher Airlines has said that the company is to close a new deal with a private investor and a consortium of banks to sort out its debt problems.

Billionaire businessman, Vijay Mallya said that he is nearing a $370 million deal with 14 banks led by State Bank of India through which the cash-strapped airline will get a working capital of 6 billion rupees ($118 million).

Earlier report had suggested that Reliance is considering a financial investment or might buy a stake through a preferential offer by the cash-strapped airlines. The report said that Reliance has approached a merchant banker to carry out due diligence of the carrier. However, RIl had rubbished the claims saying it has not such plans to invest in Kingfisher.

Kingfisher, India's second biggest airlines, is believed to be unable to raise money from the capital or debt market and it is becoming increasing difficult for the company to pay for fuel for its flights. Company staff has been dwindling as employees had lost faith in the airlines future. The airline had delayed making salary payments for August and September upsetting many employees and making them think about leaving their jobs.

Kingfisher is also facing severe fuel shortages as it has been available to pay its fuel bills. Hindustan Petroleum had suspended fuel supply to the airline causing disruptions as the airline was not able to pay a bill of Rs 130 crore.

Mallya also hinted that he is in talks with an unnamed wealthy Indian individual for a separate $250 million equity injection.