The wilder his finances have gotten, the tamer Vijay Mallya's appearance has become. Gone are the glory days when the tycoon would sport a shoulder-length salt 'n' pepper mane, ample fur on his face and a Bollywood beauty on his arm. Last week, he wore a suit, had trim hair, and in grave tones told a mob of reporters precisely nothing. For a year they have been asking if his indebted empire of firms, which spans beer, whisky, Formula One racing and an airline, is going bust.

There are grounds for hope. India's government has just changed the rules to let foreigners buy minority stakes in airlines and, last week, Mallya said he was in talks with potential investors in his carrier, Kingfisher. Two days earlier Diageo, a British drinks firm, said it was in discussions to buy a stake in United Spirits, which sells whisky and other firewaters and is controlled by Mallya.

Optimists fancy that by attracting outside investors he may keep all of his empire afloat. But Mallya's position is far weaker than that.

Kingfisher, once India's second-biggest airline, is all but dead. It has net debts of $1.7 billion and its sales have fallen by 87 percent from a year ago, to an annualized $222 million. Rather than put it through a quick bankruptcy, India's banks foolishly allowed it to stagger on under the pretense of being a going concern. Passengers have deserted a carrier struggling to pay wages and fuel bills. Only a few planes are still flying. No sane foreign airline will invest heavily in it until most of its debts are written off, its bewildering accounts cleaned up and management cleaned out.

Mallya presumably knows this (he could not, in any case, afford to bail out the airline). Thus his goal probably is not to save Kingfisher but to protect the rest of his empire. One threat is collateral damage. Beyond the shares it owns in Kingfisher, Mallya's main listed holding vehicle has $1.8 billion of guarantees given to the airline's banks and to aircraft-leasing firms. Its latest annual report says it is "reasonably confident" that these will not be invoked. If they were, it might be bust, too.

That leaves a second threat: debt elsewhere. Mallya's unlisted holding vehicles, which are hidden from view, may be struggling. And in the public eye, United Spirits, one of the two main listed drinks businesses, has $1.6 billion of debt; quite a sum compared with its annual operating profit of about $250 million. Some of the debt was incurred when it overpaid to buy Whyte & Mackay, a Scottish whiskymaker, in 2007.

Diageo's aim is to exploit all this and buy control of United Spirits (Mallya's vehicles have a 28 percent stake) to gain a powerful position in a big market with growing thirst for high-end booze. But its target's shares already are expensive and Mallya probably has other ideas -- after all, if he cedes control of both the airline and the spirits businesses he will become an Indian business D-lister. He will hope that Diageo injects enough equity into United Spirits to lower its debt but does not take immediate control. There is a precedent of sorts: In his beer company, he has achieved a balance of terror with his partner, Heineken, with each side owning a 37.5 percent stake.

Diageo will pretend to be patient, but waiting for a transformational acquisition has a high opportunity cost. It last tried to strike a deal with Mallya in 2009, and since then its archrival Pernod Ricard of France has stolen a march on it, expanding its whisky business in India quickly.

A lot will depend on the banks -- they have the power to bring Mallya down, but are timid about confronting India's tycoons. No doubt the sober image Mallya has adopted is designed to impress them.