State-owned Kuwait Airways has delayed plans to privatise the airline and will now push ahead with the restructuring of the ailing carrier, a committee formed for the privatisation plan said on Sunday.
Kuwait Airways was offering 35 percent of its share capital of KD220m ($805.3m) to potential long-term investors, amounting to around $280m, as part of the plan.
“The delay in privatising KAC gives us the opportunity to address a number of operational and structural issues ahead of a future privatisation programme,” it said in a statement. The privatisation 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 privatisation 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 percent the new airline company which will have a predetermined share capital of KD220m ($806m), the privatization committee had said.
Joint-stock companies listed on the Kuwaiti bourse and “specialised” international firms are allowed to subscribe, the company had said in a statement in August. Kuwait’s parliament approved a plan in 2008 to privatise loss-making Kuwait Airways Corp. Under the plan, the government will sell 40 percent of the airline to the public and 35 percent to a long-term investor.
Last year, Kuwait appointed Citigroup auditors Ernst & Young and aviation consulting firm Seabury to handle the privatisation of its national carrier, which has a fleet of 17 planes.