Qatar Airways seeks up to 10% stake in American Airlines
Qatar Airways, its Middle Eastern business pressured by a diplomatic row with neighbors, is seeking as much as a 10 percent stake in American Airlines, the US carrier said Thursday.
The surprise investment push by Qatar Airways was disclosed by American Airlines in a securities filing Thursday saying the Qatari company planned to buy at least $808 million in American shares.
In addition, Qatar Airways’ chief executive told his counterpart at American that the carrier sought a stake of about 10 percent.
“The proposed investment by Qatar Airways was not solicited by American Airlines and would in no way change the Company’s Board composition, governance, management or strategic direction,” American said in the filing.
American’s bylaws require board approval to stakes of 4.75 percent or more. Qatar Airways said it would not exceed this level without board approval and would “make all necessary regulatory filings” when required.
“Qatar Airways sees a strong investment opportunity in American Airlines,” the company said in a statement.
“Qatar Airways believes in American Airlines’ fundamentals and intends to build a passive position in the company with no involvement in management, operations or governance.” The move comes as Qatar faces conflict with neighboring countries after Saudi Arabia, Bahrain, Egypt and the United Arab Emirates severed ties over Doha’s alleged support for extremist groups and Iran. The countries have suspended all flights to and from Qatar.
Qatar’s government denies all the allegations.
Qatar Airways has downplayed the impact of the dispute on its business, saying on June 14 that the “vast majority” of its network was unaffected. But analysts have warned the profitable carrier could take a hit should the diplomatic crisis drag out. (AFP)