Jazeera Airways completes a capital increase of KD 10 million successfully
The first rights offering including tradable preemptive rights in Kuwait
KUWAIT: Jazeera Airways “Jazeera” and Kuwait Financial Centre “Markaz” announced, in a joint statement, the successful completion of the capital increase subscription process with a total value of KD 10 million through the issuance of 20 million shares at a subscription price of 500 fils per share, representing 10 percent of the issued and paid-up capital of the company.
The subscription coverage rate of the capital increase stood at 210 percent, as announced by both companies, marking the completion of the first tradable preemptive rights in Kuwait, which ran for 21 days - from 15 June to 5 July. Preemptive rights were traded on Boursa Kuwait from 15 to 28 June, at a reference price of 143 fils per right for the first day of trading and average price of 165 fils per right, which resulted in the trading of approximately KD 460 thousand worth of preemptive rights. The subscription coverage rate reflects the high demand for the company’s shares by shareholders and investors who benefited from the trading of preemptive rights.
On this occasion, Rohit Ramachandran, Chief Executive Officer (CEO) of Jazeera Airways, stated that the subscription process fulfilled all legal requirements, and witnessed the issuance of tradable rights securities for the first time on Boursa Kuwait. This was done in an effort to compensate shareholders who did not subscribe to the capital increase, and fulfill regulatory requirements, while supporting Jazeera Airways’ future operations.
Ramachandran added that Jazeera Airways seeks to increase the number of its destinations, from the current 35 to 65 destinations within the next three years, after adding 13 new aircrafts, bringing its fleet to a total of 30, noting that during the pandemic, the company launched 10 new routes including Addis Ababa in Ethiopia and then Colombo, Tbilisi, Bodrum, Trabzon, London Heathrow, Bishkek, Tashkent, Antalya, and Kiev in Ukraine.
Ramachandran also stated that allowing vaccinated expatriates to travel and return to Kuwait starting from August and gradually reopening the airport, is an important step towards restoring the balance from a health and economic perspective. Ramachandran also said that Jazeera Airways is looking forward to reactivating a series of flights that were stopped during the pandemic. He indicated that the company has requested the reactivation of 8 destinations in August, and that it is currently integrating systems in preparation for the beginning of August, as travelers must show proof of vaccination when booking flights on the company’s website.
A great success
Jazeera Airways appointed Markaz to act as the Lead Manager and the Subscription Agent, due to Markaz’s extensive experience and track record in this field. Ali H Khalil, Chief Executive Officer (CEO) at Markaz, expressed his contentment with the success of the subscription process. He stated: “We take pride in being the Lead Manager of this issuance, considering it is the first tradable preemptive rights to date, in Kuwait, and in collaboration with a prominent company such as Jazeera Airways, which seeks to benefit from the recovery of the global economic situation post the pandemic”.
Khalil added: “We recognize the importance of capital markets in supporting the stability of an economy, and hence, at Markaz, we are keen to contribute to the development of Kuwaiti capital markets and provide shareholders with various investment opportunities through the management of capital increase subscriptions, in addition to bonds, sukuk and others.”
Khalil expressed his sincere gratitude to the Capital Markets Authority and Boursa Kuwait for introducing new investment tools such as preemptive rights, marginal trading and others, to enrich capital markets and benefit shareholders. He also thanked the Kuwait Clearing Company for their continuous support.
A solid financial foundation
At a time when challenges increased due to the pandemic, Jazeera Airways maintained its balance and stability due to its solid financial foundation. The company’s cash balance at the end of March amounted to KD 17.5 million, in addition to the proceeds of KD 10 million raised through the recent capital increase. The company is also currently in the process of collecting a total of KD 6 million in receivables, further strengthening the liquidity of the company and enabling it to deal with any developments, on the back of the company’s solid financial position.
Thanks and appreciation
Ramachandran acknowledged the Capital Market Authority’s role in managing the rights offering request, and speed of its response and support during the process of increasing Jazeera Airways’ capital, expressing his appreciation to both the Boursa Kuwait and the Kuwait Clearing Company for their role in implementing the rules concerning the trading of preemptive rights, which took place seamlessly.