ALAFCO chairman Ahmad A Alzabin has
denied speculation that the Kuwait-based aircraft leasing firm is considering
the purchase of a 35 percent stake in Kuwait Airways Company (KACnew).
Speaking to Dubai-based trade
publication Aviation Business, Alzabin stated that contrary to media reports,
there was “zero interest” in the investment.
“That will not happen,” he refuted.
“We want to focus on our core business of aircraft leasing and related
activities, so there is zero interest in purchasing a stake.”
KACnew will be established as a
result of Kuwait Airways Corporation’s forthcoming privatisation, with a 35
percent share on offer to potential investors. In addition, 40 percent will be
sold in a future initial public offering (IPO), while 20 percent will be owned
by Kuwait Investment Authority (KIA) and the remaining five percent will be
granted to employees.
ALAFCO, which reported a net profit
of US$105m for the first nine months of its current fiscal year, was
actually established in 1992 by Kuwait Airways Corporation, which still owns an
11 percent stake in the aircraft leaser.
However, Alzabin does not believe
his operations will be impacted by the privatisation of Kuwait Airways
“I cannot image we will be
impacted,” he stated. “ALAFCO is a good investment for them and they cash a
considerable profit at the end of each year from our operations. Of course, we
wish them the best of luck and if they ever need our help with the supply of
aircraft, we will not hesitate to support them in the future.”
Potential investors for the 35
percent stake in KACnew had until 25th August 2011 to submit their expressions
of interest, although Saj Ahmad, analyst at FBE Aerospace, believes the
national carrier will struggle to attract a large amount of applications.
“Overall, the privatisation of
Kuwait Airways is not to be celebrated, rather it’s a question of whether the
airline can raise enough capital to survive and redevelop itself or whether it
collapses under the burden of debt,” he reasoned. “Kuwait Airways is a heavy
loss making airline - turning it around will be no easy or cheap feat.”
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