Tanzanian regulator approves Precision Air IPO

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Tanzania’s stock market regulator has given Precision Air, the country’s biggest airline, approval for an initial public offering to expand its fleet and fund expansion through new routes.

“We have approved Precision Air’s IPO…They have submitted the final documentation requested by us so they can now proceed with the initial public offer based on their own timetable,” Tanzania’s Capital Markets and Securities Authority (CMSA) chief executive Fratern Mboya told Reuters.

Precision Air, 49 percent-owned by Kenya Airways, plans to sell a third of its shares in the IPO.

Orbit Securities is the lead adviser and sponsoring broker for the IPO. “We are now making final touches, we should be able to complete the necessary preparations within two to three weeks,” Orbit chief executive Laurean Malauri told Reuters. Malauri added that the Precision Air IPO should be open to the market by early October.

The Dar es Salaam Stock Exchange has also approved the IPO. “It is up to the issuers, their advisors and the CMSA to finalise things,” DSE chief executive Gabriel Kitua told Reuters. “We understand they are very busy finalising small details, there is a lot of documentation involved.”
“Precision Air will bring in new investors and will propel the growth of Tanzania’s aviation industry,” Kitua said.

The airline last year sought regulatory approval for the sale of the shares, which will result in Kenya Airways cutting its stake to 34 percent.

Precision’s chairman, Michael Shirima, started the company in 1993, offering charter services with a five-seat Piper Aztec aircraft. The firm operates an ATR 72-500 and ATR 42 planes and a Boeing 737 to 13 destinations in Kenya, Tanzania and Uganda.

Precision said in late 2009 it planned to invest about US$300 million within three years to expand its fleet.