Mallya is understood to have reached Lucknow, headquarters of Sahara, to finalise the deal on Sunday night. Under huge losses—the airline has never made profits since its inception in 2005—the airline is desperate for infusion of funds.

The likely deal comes in the wake of a meeting of the bankers in Bangalore last week who advised Kingfisher to rope in a financial investor.

The accumulated losses of the airline has reached a staggering Rs 6,000 crore while the carrier, which closed down its low cost arm Kingfisher Red recently, owes banks to the tune of Rs 6,200 crore. The airlines owes another over Rs 1,000 crore to oil marketing companies.

Subrata Rao recently joined hands with Mallya as he picked stake of $100 million in the liquor baron’s Force India, the Formula 1 team. Sahara itself is no stranger to airline business – its Air Sahara was flying until 2007 and it was later sold to Jet Airways in a controversial deal.