The Sahara group will give a loan of more than 2.5 billion rupees to cash-strapped Kingfisher Airlines, to help the carrier continue operations, the Times of India quoted sources as saying.

Kingfisher Airlines

Kingfisher, India's third largest airline by market share, has been struggling to raise funds to continue operations and repay debt.

The carrier, majority-owned by Vijay Mallya controlled UB group, has a debt of about 65 billion rupees and its creditors have asked the airline to raise at least $160 million in equity.

"We neither confirm nor deny speculation," Ravi Nedungadi, group chief financial officer and president of UB Group, was quoted as saying in the report.

Early this year, the Sahara group invested $100 million in Force India for a 42.5 percent stake and now co-owns the Formula One motor racing team with Kingfisher Airlines Chairman Vijay Mallya.

Spokesmen for both Kingfisher Airlines and Sahara group declined to comment on the report when contacted by Reuters.