Boodai Corporation, Kuwait's investment holding conglomerate, has hired HSBC to advise it on a possible stake sale in low-cost carrier Jazeera Airways , say sources familiar with the matter.
The family-owned investment company with business interests covering aviation, engineering, construction and media, was looking at various options to sell down its stake in the airline, the sources said.
It holds 16.89 percent of Jazeera directly and further stakes indirectly through special purpose vehicles, giving it a controlling stake, according to the sources. Reuters was unable to verify the exact size of the stake.
One of the sources said since talks commenced with HSBC, law firms had been invited to submit proposals to advise a publicly listed airline in Kuwait, in which a major shareholder was considering options including a merger or acquisition, a re-initial public offering or listing global depositary receipts in an overseas foreign market. The source was unaware which airline the request related to.
HSBC declined to comment. Nobody was immediately available to comment from the Boodai Corporation. It is the latest sign of merger and acquisition activity in Kuwait after Kuwait Food Co (Americana) said last month its majority shareholder, Kuwait's billionaire al-Kharafi family, had signed an initial agreement to sell their holding to Gulf-based Adeptio Group.
Chairman Marwan Boodai set up the airline in 2004, the first non-government owned airline in the Middle East. Today it serves 19 destinations in 11 countries, according to its website, and has a market capitalisation of around 179.9 million dinars ($596 million), according to Thomson Reuters data.
People familiar with the M&A industry said Boodai might struggle to find a buyer because aviation was not as popular a sector for investors in the region as industries such as fast-moving consumer goods, healthcare and finance.