Kuwait looking for investor to buy 35 per cent stake [Archive]

Panama Jack

4th Aug 2011, 04:51

The Kuwait government is looking for an investor to buy a 35 per cent stake in the Kuwait Airways Corporation, in the first stage of the privatisation of the airline.

In 2008 the government decided to sell 40 per cent of the flag carrier, which has not made a profit since 1990, to the public, 35 per cent to a new investor who must not be a Kuwait based airline, and five per cent to employees. The remaining interest will be held by the state. The deadline for submissions is August 25.

Source: IFALPA Daily News Service

I bet all sorts of saavy, World-class, capitalist-minded investors are going to beat each other up trying submit the trumping bid for a slice of this lemon. :rolleyes:

jimmyg

4th Aug 2011, 07:22

Yes, I agree.

Not only will outside investors be most difficult to attract given the current weak operation, corrupt and disingenuous environment. Least not to forget that the entire airport/operation is in shambles and the DGCA is a good 20 years behind the times. But who knows given the right incentives of government subsidies, share capital and kickbacks, there might be a few players.

Kuwait Airways privatization formally opens to investors
David Kaminski-Morrow, London (Aug, 08:34 GMT, 367 words)

Potential investors have been formally invited to show initial expressions of interest in the privatization of Kuwait Airways, with an offer to subscribe to 35% of the share capital.
The privatization of the Kuwaiti flag-carrier has been a drawn-out affair, complicated by postponements and asset audits, but is set to proceed through the establishment of a new company, KACNew.
All assets, liabilities and rights of the airline will be transferred to KACNew, said the carrier's privatization committee, and it will have a share capital of KD220 million ($805 million).
A strategic review of the airline has shown that a "holistic transformation" of the flag-carrier provides a "compelling investment opportunity", the committee added.
"[Kuwait Airways'] turnaround potential is underpinned by a business plan that factors in the company's market opportunities and privileges and demonstrates its ability to operate as a profitable standalone airline," it said. The initial invitation is open until 25 August.
The Gulf state's Kuwait Investment Authority will own 20% of the privatized KACNew, ensuring that the carrier will continue to have government backing.
Kuwait has undergone upheaval in its airline industry in the last five years, after the government attempted to create more options in air transport by permitting three additional airlines for the emirate.
The project has had little success. Wataniya Airways collapsed under financial pressures, proposed cargo carrier LoadAir failed to emerge, and low-cost airline Jazeera Airways has scrambled to restructure its operation, canceling a large outstanding order for Airbus aircraft.
But the reduction in potential competition could prove timely to Kuwait Airways as it seeks investors. The privatization committee said the carrier held on to a 31% market share last year and the carrier is the only domestic operator with long-haul services.
"Interested parties are now invited to submit their expression of interest," the committee stated, adding that the scheme is open to joint-stock companies listed on the Kuwaiti stock exchange or "specialized international companies". Kuwaiti-domiciled airline operators cannot participate.
"Any sale of the company must realign the airline towards a successful future entity that builds on the aspirations of the Kuwaiti people and the past successes of this national institution," the committee said.

Source: Air Transport Intelligence news