(MENAFN - Arab Times) Jazeera Airways held a press conference on Monday morning launching its rights issue for the purpose of funding future growth.
Jazeera Airways Chairman Marwan Boodai held a briefing session for the press, stating that "This rights issue is of strategic importance for the company and will help fund future growth plans as well as close current high-interest commitments." The rights issue was announced last week and launched Monday, and aims to boost Jazeera Airways Group's capital by 74 percent, reaching KD 42 million. This will take place by issuing 178 million shares at a nominal value of 100 fils per share.
In the briefing, Boodai stated that Jazeera Airways Group had achieved record-breaking profits over the past 9 quarters, after implementing a plan to return to profitability in 2010 that turned around the company's fate after it was hit with the first losses since its establishment in 2005, during the recession in 2008. The rights issues comes as part of a strategic master plan that was launched in January 2012, and will go on until December 2014, which aims toward establishing a growth in returns, as well as load rate from 66 percent to 68 percent. In addition, this includes the continuation of obtaining leading market shares.
The aim of the rights issues is to provide funding for growth projects in the future, generating funds that will contribute to paying off the final three jets that have been ordered to complete the fleet, in addition to contribution to the payment of the high-interest loans that were taken up during the recession. This in turn will help make flight tickets more affordable for clients, which will contribute to the company's growth. An Amiri Decree was issued in August of this year that allowed the company to expand its capital to KD 42 million. This was followed by the finalization of the customary ministerial procedures by the beginning of December, followed by an announcement in the official Kuwaiti gazette. Jazeera Airways is the only fully private airline in the Gulf region, which more or less functions without government imposition of limitations upon its operations.
Subscription is open to existing shareholders from Dec 17 to Dec 31, and the rights issue prospectus can be viewed at the company's investor relations page on their website, as well as at the Kuwait Clearing Company, the Kuwait Stock Exchange and Jazeera Airways Group's headquarters.
Throughout the years Jazeera Airways has expanded its fleet to include 15 A320 aircrafts, 12 of which are already in their possession, with three remaining aircrafts on order. The airlines flies to 19 different destinations, and in 2011, flew a total of 1.2 million passengers. The company operates on a short-distance network of flights with destinations including Bahrain, Beirut and Cairo. In November, Jazeera Airways announced a record Q3 net profit of KD7.6 million, a 24.6 percent increase from the same period last year, as well as breaking its own record of best nine-month profit for the year with KD11.4 million, a 23.6 percent increase from the same period last year.