Troubled Gulf Air granted debt extension
The three strategic equity partners of the troubled Gulf Air— the governments of Oman, Bahrain and the emirate of Abu Dhabi—have frozen the regional carrier’s state debts since May 2002. The airline’s 485 million Emirati dirham ($132 million) balance due will be waved until September in a bid to support the company’s financial restructuring process.
As part of the reform scheme drafted for the airline by an external auditor, US-based consultants Simat Helliesen & Eichner (SH&E), Gulf Air will be letting 10 percent of its 5,000-strong staff go— half of which have already left on early retirement—devising a regionally-focused flight schedule and looking to buy new jets made by Canada's Bombardier or Brazil's Embraer.
In June, fourth partner Qatar pulled out from the debt-ridden venture, having refused to pay any more capital to bail out Gulf Air of its financial predicament. The airline management is hoping that Qatar will decide rejoin the partnership with the implementation of the new three-year recovery scheme.
The three remaining partners have injected 30 million Bahraini dinars ($79.5 million) each into the company last month, having already infused Dh60 million into the airline in 2001. The total debts of Gulf Air are put at around $800 million.
Established in 1949, the Bahrain-based Gulf Air currently has a fleet of 30 aircraft. It operates some 1,000 flights to and from the Gulf every week, serving over 53 cities worldwide. The airline's authorized capital currently stands at BD135 million. — (menareport.com)
© 2002 Mena Report (www.menareport.com)