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Mon 19 Nov 2018 09:23 AM

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Bahrain to IPO three companies by 2020 to boost government revenue

The move is part of a programme dedicated to eliminating the kingdom's budget deficit by 2022

Bahrain to IPO three companies by 2020 to boost government revenue
Bahrain, which has the smallest economy in the GCC, revealed a series of reforms after it received $10 billion in aid from Kuwait, Saudi Arabia and the UAE in October to help steady its finances.

In line with its plan to boost government revenue, Bahrain will sell stakes in three logistics-related companies on its stock exchange over the next two years, according to the country’s transportation and telecommunications minister Kamal din Ahmed.

It aims to sell around 20% of Bahrain Airport Services, the operator of Bahrain International Airport, Bahrain Duty Free and the $1.1 billion new airport terminal, Ahmed told CNBC Arabia.

“As the main shareholder in these companies, we hope the other shareholders agree and we float a small percentage of about 20% of the companies on the Bahrain Bourse,” he said, adding that the IPOs will also encourage competition and transparency.

Bahrain, which has the smallest economy in the GCC, revealed a series of reforms after it received $10 billion in aid from Kuwait, Saudi Arabia and the UAE in October to help steady its finances and prevent it from experiencing a credit crunch.

It also introduced a 33-page financial programme dedicated to eliminating its budget deficit by 2022. It includes reducing public spending, improving efficiency in state expenditure, introducing a voluntary retirement scheme for government employees and implementing 5% VAT next year.

The country's gross domestic product (GDP) rose 2.4% in the second quarter of 2018 compared to last year due to an increase in crude prices and growth of its non-oil private sector, according to the Bahrain Economic Quarterly Report produced by the Bahrain Economic Development Board.

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