MEA share sales put on hold

Lebanon's Daily Star reported today that Middle East Airlines (MEA) chairman Mohammad Hout has said the time is not ripe to sell the airline's shares in 2009 due to the unfavourable market conditions.

"As I said before, we will not list part of the airline's shares on the Beirut Stock Exchange [BSE] because projections in the markets do not look very promising," he told The Daily Star.

The central bank controls 99% of the national carrier.

The Lebanese government, which is struggling to reduce a $47 billion public debt, was hoping to generate badly needed revenues from the privatisation of the telecom sector and the sale of the central bank's assets to reduce the mounting budget deficit in 2009.

But the global credit crunch even prompted Prime Minister Fouad Siniora to admit that the time may not be ripe to push ahead with privatisation for at least the next two years.

MEA was hoping to list 25% of its shares on the BSE as part of an effort to transfer ownership of the airline to the private sector.

But Hout, who is credited for restructuring MEA and turning the airline into a profitable entity, said MEA's profits continued to rise despite the poor economic conditions in many countries of the world.

"I can [say for sure] that we will make a profit of more than $70 million in 2008 as the number of passengers rose by 20% last year," he added.

MEA recorded a profit of $60 million in 2007, although that year was marked by several security incidents.

But Hout stressed that despite these profits MEA was still settling the mounting losses that were incurred by the airline many years ago.

It is estimated that the central bank spent nearly $500 million to cover MEA's losses before Hout took the reins in 1999 the Beirut newspaper reported.