Sunday, Oct 30, 2011
DOHA (Zawya Dow Jones)--Kuwait's government has given the green light to restructure loss-making Kuwait Airways ahead of its planned privatization, which will involve selling 35% of the airline.
"The Council of Ministers has approved the recommendation...to provide the legal framework for the restructuring and reformation of KAC prior to its privatization," said a statement from the privatization committee of Kuwait Airways, or PrivComm, the group handling the process.
The privatization of Kuwait's national carrier will involve offloading a strategic 35% stake to a company listed on the country's stock exchange or a specialized international firm, but the process will exclude any domestic airline operator, the committee said in August.
Under the protracted privatization plan, that has been in the works for a number of years, the country's sovereign wealth fund will retain a 20% stake in Kuwait Airways, while 40% of the airline will be offered to the public in an initial public share sale of a yet to be determined date.
PrivComm said it had concluded a review of expressions of interest to participate in the privatization process. A "broad range" of local and international parties had submitted their interest, it added, yet, despite this, it had chosen to recommend restructuring the airline to the government.
The decision to delay privatization gives the airline "an opportunity to address a number of operational and structural issues", PrivComm Chairman Motlaq Al Sane said in the statement, without saying what the issues were.
Kuwait Airways, established in 1954, operates 17 aircraft and controls about 31% of the Kuwait market. In 2010, it made a full-year net loss of $556 million and carried 2.62 million passengers.
-By Alex Delmar-Morgan, Dow Jones Newswires; +974 6659 9818; alex.delmar-morgan@dowjones.com
Copyright (c) 2011 Dow Jones & Co.
(END) Dow Jones Newswires
30-10-11 1100GMT
