Al-Jazeera IPO attracts huge interest

The IPO for Al-Jazeera Airways, Kuwait’s first private airline, was 12 times oversubscribed.

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By  Neil Denslow Published  June 10, 2004

The IPO for Al-Jazeera Airways, Kuwait’s first private airline, was 12 times oversubscribed, according to one of the company’s founders. The no-frills start-up offered 7 million Kuwaiti dinars (USD$23.74 million) of its 10 million dinar capital to the public and it received expressions of interest for more than 84 million dinars worth. "I think this is the largest amount of oversubscription in Kuwait's history," Jassem al-Boodai of Boodai Group told Rueters. "Al-Jazeera's shares will now be distributed pro rata," he added. There will be no increase in the original capital base, despite the huge demand. As such, an investor who applied for 10,000 shares, for instance, will be allocated fewer than 1000 shares. Boodai Group, which owns a number of Kuwait companies, including Al-Rai al-Aam and Hilal Cement, will provide the remaining 30% of the capital along with other investors. Al-Jazeera's is expected to be operational by early next year, and the company is already in talks with Boeing and Airbus about purchasing four jets. Once it takes to the skies, the airlines is expected to offer tickets that are around 55% cheaper than those of the loss-making state carrier, Kuwait Airways. The carrier’s first destinations are expected to include Lebanon, Syria, Jordan, Egypt, Iran and other countries in the Gulf.

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