Airline to sell Sh2.7bn shares

Precision Air, the Tanzanian airline partly owned by Kenya Airways, will sell part of its shares to the public in October to raise Sh2.7 billion to support its fleet expansion.

The airline will list at the Dar es salaam Stock Exchange.

The initial public offering will see both Kenya Airways, currently holding 49 per cent stake and Tanzanian businessman Michael Shirima, with 51 per cent stake, dilute their shares to 34.2 per cent and 34.6 per cent, respectively. A total of 55 million new shares will be issued.

The public offering has had two false starts, in late in 2010 and in April 2010, in what the management says were delays in getting approvals from regulatory bodies in Tanzania.

Final approval

“We now have the greenlight from our stock exchange and, with the final approval from (Tanzania) Capital Markets Authority expected in two weeks, we should be able to go public by October,” said Mr Alfonse Kioko, the airline’s managing director.

The Kenya Airways management says the deal was approved in July last year in readiness for the additional issue of shares to help Precision increase its fleet.

Mr Kioko, who was speaking after receiving a new plane — a Boeing 737-300 — in Nairobi, said part of the money will used to acquire new planes.

“We want to increase our fleet to 17 by the end of next year from the current 11. This money will be critical in this plan. Kenyans will have a chance to buy the shares, but they will have to get an agent in Tanzania,” he said.

The new Boeing will fly between Nairobi and Dar es Salaam and Mwanza and the recently launched routes to Hahaya (Comoros) and Johannesburg (South Africa).

The airline also flies to Arusha, Kilimanjaro, Zanzibar, Kigoma, Tabora, Musoma, Shinyanga, Mtwara, Mombasa and Entebbe.

Mr Kioko says the expanded fleet will allow Precision Air to open new routes as it races to increase its presence in East Africa.