Kuwait's Jazeera cancels premium on rights issue

Kuwait’s Jazeera cancels premium on rights issue

Carrier asks for shareholder support.

August 25, 2010 12:41 by Reuters

Kuwaiti carrier Jazeera Airways said on Wednesday it was cancelling a premium on a planned rights issue and it expects support from its shareholders and lenders to provide liquidity.

Jazeera said in a statement its board of directors had recommended cancelling the 50 fils premium. The firm was planning to issue 200 million shares at 150 fils each, including the premium, to raise its capital by 91 percent to 42 million dinars ($145.5 million).

There are 1,000 fils to the dinar.

The airline, which started operations in 2005, said in a separate statement to the stock exchange on Wednesday that a part of its auditors report was mistakenly dropped from its results announcement Aug. 12.

That part said the company’s current liabilities exceeded its current assets, and its “management expects that its plans and work strategies … in addition to financial support from shareholders and lenders will provide the needed liquidity to meet its dues.”

Jazeera made a loss of 4.7 million dinars in the second quarter of this year. It made a loss of 1.26 million dinars in the year-earlier period.

The carrier, which aims to fly 82 routes in the Middle East within the next five years, competes with United Arab Emirates-based Air Arabia and Dubai-based carrier flydubai which started operations last year.

(Reporting by Diana Elias; Editing by Jon Loades-Carter)