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 By Alawi Masare
The Citizen Reporter
Dar es Salaam. All is set for Precision Air Services to offer its 58,841,750 shares for sale during the planned Initial Public Offering (IPO) scheduled to start on Friday.The company seeks to raise Sh27.9 billion to finance the company’s expansion plan, according to the chairman of the company board of directors, Mr Michael Shirima. The IPO would run from October 7 to 28 followed by announcement of offer results on November 11, this year.
According to the company’s prospectus, 93.5 per cent of the net proceeds will be used as capital expenditure, while 6.5 per cent will be used as working capital enhancement.
The IPO shares represent just 30 per cent of 193,856,750 current shares of the company. The company officially announced yesterday that the much awaited IPO and subsequent listing on the Dar es Salaam Stock Exchange (DSE), had received all requisite approvals to proceed.
Every share will be sold at Sh475 and the minimum number of shares per application during the three weeks of IPO will be 200, Mr Shirima said when briefing reporters at the company offices yesterday.
Reacting to some arguments that the shares in the IPO have been overpriced, Mr Shirima noted that the price was low as it has been discounted by 11 per cent from the value set by experts’ calculations. He invited the government, individuals and public institutions to contact registered stock brokers and some banks for the application forms, noting that people might buy the shares in any CRDB Bank branch or Stanbic Bank branches across the country.
“It should not be surprising if the government buys shares and has partial ownership of the company. Precision Air is a Tanzanian airline and 51 per cent of the shares should be owned by the locals,” said Mr Shirima. The decision to launch the IPO and listing on the DSE was aimed at, among other reasons, raising capital in a short period for further expansion of the airline services.
Mr Shirima also said it would enable Tanzanians to own part of the company and dispel wrong information that the airline is owned by foreigners. Some 49 per cent of the company are currently owned by Kenya Airways.As part of its expansion plan after the IPO, Precision Air eyes new routes to the Democratic Republic of Congo (DRC) and Angola.
Speaking during the briefing, the Precision Air chief executive officer, Mr Alfonse Kioko, said talks with Angolan authorities were in final stages and they may start servicing the route early next year.
“The fleet expansion plan includes the increase of the number of aircraft and launching of new routes. Talks on the Angola route is in its final stages and we expect to conclude the talks for possible commencement of services on the new route early next year.
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