Shareholders of Kuwait's Jazeera Airways have approved a board recommendation to reduce the company’s capital from KD42 million ($138.8 million) to KD20 million ($66 million), following its exit from the aircraft leasing business.

As per the recommendation, the company will buy back 220 million shares at the nominal share price of 100 fils, resulting in a KD22 million ($72.7 million) shareholder payout, which when combined with the company’s special dividends payout of KD20 million ($66 million) in June, and with KD10.7 million ($35.3 million) in 2015 accumulated earnings and other reserves that are required by law to be distributed as part of the capital reduction, the company’s cash payout to shareholders in 2015 will total KD52.7 million ($174.2 million).

Marwan Boodai, Jazeera Airways chairman, said: “Today’s shareholder approval to adjust the company’s capital is the last step of the company’s successful strategic exit from the capital-intensive aircraft leasing business earlier in the year. Going forward, our focus will be on the growth opportunities available in our home market within the passenger airline business, which generated over 80% of the company’s net profit last year. We believe that passenger airline business in Kuwait will continue to grow strong and we are well prepared to take advantage of this growth”.

The capital reduction process will also include the settlement of all debts held by the company, resulting in a debt-free company by year-end.

The company’s share buyback program will be the first voluntary share buyback program exercise in Kuwait based on the new share buyback procedures stated by Kuwait’s new Commercial Companies Law (97/2013). – TradeArabia News Service