Resuming operations in Wataniya Airways relies on shareholders

12/05/2011 00:00 AST

Resumption of operations in Wataniya Airways relies on its shareholders' approval of adding 15 million Kuwaiti dinars to its capital, Chairman and Chief Executive Officer (CEO) of the now out-of-business carrier Abdulsalam Al-Bahar said Wednesday. "Raising capital might take six months and requires an Amiri Decree for the purpose of reconstruction," Al-Bahar told reporters on the sideline of the company's general assembly. Ceasing the company's operations was due to, according to Al-Bahar, "thorny" financial situations of the company and the lack of fair trade requirements in the local market. He added that the ceasing decision, taken on March 16, 2011, came to protect interests of the shareholders. Al-Bahar also pointed out that the global financial crisis, which coincided with the launching of the company's operations three years ago, in addition to the current tense situation in the region, had contributed in impacting the company's financial status even further. These factors, said Al-Bahar, caused the company to suspend two of its main destinations: Cairo and Beirut. Most demands of the laid off 600 employees would be met by the company, he said. As for chartered planes, Al-Bahar said that local companies demanded from the Wataniya some 70 million US dollars in compensations, revealing that there are negotiations for settlements in this regard. He attributed the sudden decision to stop flights to the absence of a law that protects the company from debtors, unlike some foreign laws, especially Chapter 11's Bankruptcy Code in the United States. On why the Kuwait Stock Exchange (KSE) did not stop Wataniya shares from trading despite the suspension decision, Al-Bahar said the company addressed the market several times to stop trading, but KSE decided to re-list the stock for circulation.

KUNA