Oman Air's Upcoming Extra-Ordinary General Meeting

Mr. Ziad Karim Al Haremi, CEO-OAS said, "The EGM shall discuss, among other agenda items, the proposal for increasing the company's share capital from RO 13,282,500 to RO 50,000,000 by private placement of the increased shares to the Government of the Sultanate of Oman, and amendment of the Articles of Association accordingly. The Government shall disburse the full amount in cash and thus, be possessing more than 80% stake. The issue price of the Company share shall be RO 1.546 and the additionally placed shares shall be 36,717,500".

On the subject of placement of the increased shares to the Government, the CEO added, "The company is planning to operate long haul routes which necessitate the purchase of wide bodied aircraft, together with connected logistic support, to facilitate Oman Air to perform efficiently, taking into consideration that the average price of such aircraft amounts to US$ 90 million. Due to this high acquired cost, it is anticipated that the company endure financial losses at least for the upcoming five years.'

He said, "With the Sultanate's Government policy towards endorsing tourism, it has appreciatively expressed eagerness to fully support the company so as to implement its future operational plans. Consequently, the Board of Directors was convinced that the Government is the most apposite partner to augment the company's share capital.'

Al Haremi confirmed that the move should positively be reflected in the company's ability to grow, expand, and meet up the mounting competition from the regional carriers. It should be noted that several financial institutions also local and international banks have indicated real concerns that the company raise its capital in order to fund its purchased or leased aircraft.

He added, "By raising the capital, we will continue to be in a firm position to achieve our anticipated goals and objectives - that is presenting Oman Air as an international carrier, but the restraint of capital has been always a real challenge obstructing our capacity to grow and expand through a well planned commercial strategy."

He confirmed, "The increase of the capital to RO 50 million by issue of new shares came after conducting lengthy and comprehensive studies based on sterilized economic perspectives, thus reflecting our actual cost of operations, which records RO 100 million."

Al Haremi concluded by saying, "Our future strategies focus on precautious economically planned growth, which shall contribute positively towards the support of the national economy in general, and the promotion of tourism in particular. The company shall focus on plans to achieve more profits to the shareholders and increase the number of professions to Omani youth.

'By the Government possessing the additional shares, the company shall be in a position to boost up its existing fleet and will facilitate operating to new routes to the Sultanate via countries exporting tourism from Europe and East Asia. Moreover, the wide body aircraft shall facilitate the capacity increase on our present routes whenever required. In general, our initial strategic plan requires the establishment of an extended route network.'