Lebanon's flag carrier to float up to 20% stake

Beirut: Lebanon's flag carrier, Middle East Airlines (MEA), has said it would float 10-20 per cent of the company when it lists on the Beirut bourse next year.

"We will offer between 10 and 20 per cent of the shares on the bourse but the final figure has yet to be decided as we are conducting the financial and legal studies for this," MEA chairman Mohammad Al Hout said.

Hout said in October that MEA would float shares on the Beirut Stock Exchange as early as next July after previous efforts to attract a strategic or financial investor failed, but that did not mean the central bank was planning to sell.

Central Bank Governor Riad Salameh said he had no immediate plans to sell but that the flotation, agreed in an MEA general assembly in May, could help raise capital.

Lebanon's central bank bought 99 per cent of MEA in 1996 to save it from bankruptcy after losses ran into hundreds of millions of dollars. Appointed the following year to restructure the airline, Hout cut 40 per cent of the staff and reversed 26 years of losses to return MEA to profit in 2002.

Profit forecast

Hout said MEA would make around $40 million in net profit this year, down from $50 million in 2004, since when the February 14 assassination of former Prime Minister Rafik Al Hariri shook investors and scared away visitors.

He said the company planned to add an additional plane to its nine-strong fleet next year and another in 2008.

Hout said the new additions would probably come from Airbus, a unit of European aerospace firm EADS. The central bank has long intended to sell MEA but political bickering has hobbled government efforts to privatise the carrier.