State-owned Kuwait Airways Corp (KAC) has delayed plans to privatize the airline and will now push ahead with the restructuring of the ailing carrier, a committee formed for the privatization plan said.

Kuwait Airways was offering 35% of its share capital of 220 million dinars ($805.3 million) to potential long-term investors, amounting to around $280 million, as part of the plan.

“The delay in privatizing KAC gives us the opportunity to address a number of operational and structural issues ahead of a future privatization program”, it said in a statement.

The privatization committee said it completed the review of the expressions of interest (EOI), which was initiated in August and that it received interests from local and international parties. No further details of the parties were provided.

The committee made a recommendation to the Council of Ministers to proceed with a restructuring plan prior to undertaking the privatization process. The plan has been approved by the Council of Ministers, the statement said.

The Kuwait Investment Authority, the country's sovereign wealth fund, will own 20% the new airline company which will have a predetermined share capital of 220 million dinars ($806 million), the privatization committee had said.

Joint-stock companies listed on the Kuwaiti bourse and “specialized” international firms are allowed to subscribe, the company had said in a statement in August.

Kuwait's Parliament approved a plan in 2008 to privatize loss-making KAC. Under the plan, the government will sell 40% of the airline to the public and 35% to a long-term investor.

Last year, Kuwait appointed Citigroup, auditors Ernst & Young and aviation consulting firm Seabury to handle the privatization of its national carrier, which has a fleet of 17 planes.

 

Source: Reuters