Tanzania Daily News (Dar es Salaam)
Sebastian Mrindoko
20 December 2011
DEMAND and supply are likely to be major determinants of the value of Precision Air Services (PAS) shares scheduled for listing today at the Dar es Salaam Stock Exchange (DSE).
The sponsoring broker and Executive Officer of the Orbit Securities Limited, Mr Lauren Malauri said in an interview on Tuesday ahead of the PAS listing at the bourse that the day offers an opportunity for the public to own shares in the fast growing airliner.
“It is another opportunity for both local and foreign investors to trade in PAS shares. We anticipate positive response as the shares will be accessible for all,” he said.
Mr Malauri said the share prices will largely depend on the equity market activities after the listing event coupled with a number of investors and capital apportioned for the deal.
He said listing at the Dar es Salaam bourse is a major milestone and a challenge for the airliner to improve its performances to attract more investors to trade in its shares.
In the Initial Public Offering (IPO) issued in October, this year, the airline sought to raise 28bn/- for modernisation and expansion of its fleet, but collected just 11.84bn/- which is 42.3 per cent of the floated shares from a total of 6,667 investors who took part in the trade.
The PAS offered 58,841,750 shares during the four weeks of IPO selling, which represented just 30 per cent of 193,856,750 present stakes in the firm.
The company offered its shares for sale at 475/- discounted by 11 per cent as the calculated value was 533/-. According to the PAS prospectus, 93.5 per cent of the net earnings were to be spent for capital expenditure and 6.5 per cent balance for working capital enhancement.
The airliner had planned to spend the money to purchase five aircrafts to extend its outreach to other African destinations including Democratic Republic of Congo (DRC) and Angola.
Analysts attributed the low response to the Tanzania Breweries Limited’s (TBL) share placement that proved a more attractive alternative.
However, the PAS management was quoted as saying that much as the company missed its capital raising goal, still the fundamental goal of getting a good number of local investors to own stake in the airline was reached.
Also, the firm was confident its fleet expansion programme and network growth strategy would remain on course.
Kenya Airways acquired a minority 49 per cent shareholding in the airline in 2003 and from there, the transformation of the company’s image into professionally run modern regional airline carrier began.
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