Jazeera Airways (J9, Kuwait) parent, Jazeera Airways Group, says it will wind up operations at its Sahaab Aircraft Leasing subsidiary in order to fully focus on its airline business.
Group chairman, Marwan Boodai, told a media briefing in Kuwait on Thursday that Sahaab's fleet of fifteen A320-200s would be sold off to a consortium comprising Chow Tai Fook Enterprises Limited and Investec Bank PLC for KWD149 million (USD507 million).
“The move to divest from the leasing business, though profitable, by selling our fleet and continuing with a leased-aircraft operation was a strategic decision to enhance the airline’s business model and focus on future growth opportunities, boost shareholder value and enhance return on equity," he said. "The decision has unanimous support from our board of directors, the management teams of both our companies (Jazeera Airways and Sahaab Aircraft Leasing), and our local and international advisers.”
Jazeera Airways Group comprises two fully owned companies, Jazeera Airways, a Kuwait-based budget carrier which operates aircraft leased from sister firm Sahaab Aircraft Leasing. For its part, Sahaab's customers include Virgin America (San Francisco), TAP Portugal (Lisbon), flynas (XY, Riyadh), and SriLankan Airlines (UL, Colombo International).
Exiting the leasing business is expected to transform the Group into an asset-light, debt-free company, allowing it to further grow its profitable airline business.
Once all closing conditions and regulatory approvals have been met, likely during the second quarter of 2015, the transaction will result in KWD24 million in additional cash surplus and will lift the Group's overall cash balance to KWD82 million this year.
