Kuwait: Kuwait appointed Citigroup Inc., Ernst & Young and aviation services firm Seabury to handle the privatisation of the country's national carrier, Kuwait Airways.
Business | Aviation
Citigroup named for Kuwait airline selloff
Contracts will be signed in the coming days
- Reuters
- Published: 00:00 August 5, 2010
The state news agency KUNA quoted a state committee as saying Wednesday that the contracts with Citi and the two other companies will be signed in coming days.
Kuwait's parliament approved a plan in 2008 to privatise loss-making Kuwait Airways Corp. Under the plan, the government will sell 40 per cent of the flag carrier to the public and 35 per cent to a long-term investor.
The world's fourth largest oil exporter is on a drive to boost its private sector and become a regional financial centre.
Kuwait's economy is largely dependent on oil revenues and driven by government spending.
Kuwait Airways is the national airline of Kuwait and wholly owned by the Kuwaiti government. It operates scheduled international services throughout the Middle East, to the Indian subcontinent, Europe, Southeast Asia and North America. On January 9, 2008 the National Assembly of Kuwait approved the plan to turn Kuwait Airways Corporation into a private shareholding company. The plan was approved by 50 Members of Parliament while four MPs voted against the sale.
Kuwait Investment Authority (KIA) has formed the foundation committee for the privatization of Kuwait Airways, which started its work immediately after signing the decision.
The most serious challenge facing the committee is transferring the KAC employees, who are said not to want to work for KAC once it becomes a shareholding company. The employees will need to be moved to the public sector without affecting their financial privileges according to the law. KIA said it will restructure and develop it in order sell it at a "good price".
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