Kuwait Airways closer to IPO

Kuwait City: Kuwait Airways moved a step closer to a public share sale after the Kuwait Investment Authority (KIA) was authorised to establish a company to hold the airline's assets, its chairman Hamad Al Falah said.

Kuwait's sovereign wealth fund is forming a committee that has one year to implement the privatisation, Al Falah said in a phone interview yesterday from Kuwait.

The shareholding company will be called Kuwait Airways, he said.

Kuwait's parliament decided in January 2008 to sell shares in the airline, which hasn't made a profit since the 1990 Iraqi invasion.

The government plans to offer 40 per cent of the stock to the public, 35 per cent to a strategic investor and 5 per cent to employees, and keep the remainder. The sale was originally scheduled to occur by the end of 2009.

The cabinet "is going ahead with the privatisation and the KIA has taken over the process of the legal matter to transfer the company," Al Falah said. "We hope to complete the process this year."

The new airline company will be established with capital of 220 million dinars (Dh2.80 billion), Al Falah said.

KIA, supported by oil revenue, had assets valued at $228 billion at the end of 2008, the Council on Foreign Relations said in January 2009.

Gulf Investment and Rothschild completed an evaluation of Kuwait Airways' assets last year. The carrier operates 17 aircraft including two Boeing 777s and a mixed fleet of Airbus A340s, A310s, A320s and A300-600s.

Corruption

A committee has been formed to investigate allegations of corruption at Kuwait Airways, Communications Minister Mohammad Al Busairi told parliament March 2.

"There are financial and management irregularities, and that is why an investigation committee has been formed," he said.

Kuwait Airways had a loss of as much as 200 million dinars over the four years prior to the current fiscal year, which ends March 31, lawmaker Adnan Abdul Samad said last month in a statement.