The Initial Public Offering (IPO) of 58,841,750 shares at TSh 475 (US$ 28 cents) each in Tanzania’s Precision Air Services is set to start on 7 October and continue to 28 October. The results are to be announced on 11 November and the company expects to list and start trading on the Dar Es Salaam Stock Exchange www.dse.co.tz from 8 December. The minimum application is for 200 shares.
The airline aims to raise TSh27.9 billion (US$16.7m) to finance expansion, with most dedicated to capital spending and 6.5% for working capital. The IPO represents 30% of the company’s shares. Chairman Michael Shirima was quoted in local newspaper, The Citizen, as saying the offer price was discounted by 11% from the expert valuation.
The company prospectus was to be available on the Precision Air website (www.precisionairtz.com) from 4 October, although we cannot find it, and printed copies are also to be available from all stock brokers by today, 6 October.
At a press briefing, Shirima 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. He told: “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% of the shares should be owned by the locals.”
Kenya Airways currently owns 49% of the company. Precision Air is looking at new routes to the Democratic Republic of Congo (DRC) and Angola. During the briefing, Precision Air CEO Alfonse Kioko said talks with Angolan authorities were in final stages and they may start the route early in 2012: “The fleet expansion plan includes the increase of the number of aircraft and launching of new routes.” The airline was launched in 1993.