Kuwait Airways to Sell $280m Stake

Financial Times04.08.2011 Kuwait
Kuwait Airways to Sell $280m Stake

Kuwait Airways to Sell $280m Stake

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Kuwait Airways has put up a $280m stake for sale to international carriers and investors, the initial stage of a first airline privatization in the Gulf region.

The Gulf state's struggling national airline, which owns 17 large aircraft, will this week start holding talks with potential investors to offer a management contract and 35% of the privatized entity's KD220m ($802m) share capital, according to documents seen by the Financial Times.

The Kuwait Investment Authority, the country's sovereign wealth fund, will subscribe to a fifth of the share capital with the balance slated to be offered to employees and investors in a future initial public offering.

Regional rivals such as Qatar Airways, Abu Dhabi's Etihad and Emirates Airlines in Dubai are believed to be among the potential suitors.

Kuwait Airways has reportedly lost money for the past two decades and has in recent years come under increasingly tough competition from better-funded, more aggressive state airlines in the region.

The Gulf's oldest national carrier recorded a net loss of $556m on revenues of $771m last year, partially due to the company's large number of well-paid Kuwaiti employees.

 

Source: Financial Times

 

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