The shareholders of Kuwait’s Jazeera Airways have approved the proposal to increase the airline’s capital by 10 percent, from 20 million dinars ($66 million) to 22 million dinars.
The capital hike was approved during the company’s extraordinary general meeting held on Wednesday, the airline said in a statement. The board had earlier recommended the increase amid “challenging conditions” caused by the coronavirus pandemic.
“The increase is precautionary step to adhere to regulatory capital requirements as operations remain derailed by the prolonged closure of Kuwait International Airport,” the airline said.
“It follows a recommendation by Jazeera’s board in the face of the most challenging six quarters for the global economy and more specifically, the travel and tourism industry.”
Airlines around the world have been losing cash following the massive decline in passenger numbers. Air traffic has plunged as a result of COVID-19 restrictions and fall in traveller confidence worldwide.
“Despite the challenging conditions, Jazeera maintains a healthy asset base and a very strong unrestricted cash balance, which stood at 17.6 million dinars by the end of the first quarter of 2021,” the airline said.
It pointed out that the cash balance will increase by an additional 10 million dinars after the capital increase, setting the company up for a “solid resumption of operations” once travel curbs in Kuwait are eased.
(Writing by Cleofe Maceda; editing by Seban Scaria)
Disclaimer: This article is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Read our full disclaimer policy here.
© ZAWYA 2021
