MUSCAT -- The government is planning to convert Oman Aviation Services Co (OAS) into a fully state-owned firm. Oman Aviation Services, which operates the national carrier Oman Air, will convene an extra ordinary meeting (EGM) on May 29 to seek shareholders' approval for changing the status to a closely-held government firm, said Hussain Ali al Raisi, a board member of OAS.
This is considered as an apparent move to strengthen the national carrier, after the government withdrew from Gulf Air. "The government will buy shares from investors through an open offer. The shareholders have been informed about the EGM," he said. But the offer price is not yet announced. The company may announce the offer price at the EGM. There has been a phenomenal rise in share prices of Oman Aviation on the MSM, ever since the government announced its plans to buyback shares from minority shareholders.
The shares of Oman Aviation will be shifted to the third market of the Muscat Securities Market after getting an approval from shareholders. Thereafter, share trading will be allowed through negotiated deal. On the basis of financial strength and liquidity of a listed company, MSM is divided into three segments -- regular, parallel and third. The government recently raised its stake in Oman Aviation to 82 per cent from 34 per cent by pumping in RO 56.77 million through a private placement. The company's share capital was raised to RO 50 million from RO 13.28 million. The local investors, pension funds and other institutional investors have 18 per cent stake in Oman Aviation.
Oman Aviation posted a net profit of RO 1.24 million for the first quarter of 2007, as against a loss of RO 1.15 million for the same period last year. The better performance was mainly due to higher revenue from ground handling services and passenger traffic. Revenue from ground handling and catering divisions was much better during the 3-month period this year over the same period last year. There has been a 13 per cent growth each in flight traffic and demand for catering services at Seeb airport during the 3-month period.
Total revenue grew 15.1 per cent to RO 21.3 million from RO 18.5 million. Oman Air is planning to buy five Airbus 330-200s, as part of a major expansion programme. The airline is in the process of appointing two international consultants to devise a strategic plan and for re-branding. In fact, the airline, which is planning to start long haul operations, will buy several planes. This could be a mixture of Airbus and Boeing.
By A E James
© Oman Daily Observer 2007
