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Kenya Airways says not selling its Precision stake
Fri Jul 16, 2010 3:18pm GMT
By Duncan Miriri
NAIROBI (Reuters) - Kenya Airways will not sell any of its shares in Precision Air when the Tanzanian carrier offers stock to the public later this year, both companies said on Friday.
With an 85 percent market share, Precision is the main airline in Tanzania, which is east Africa's second-largest economy.
It wants to raise about $28 million by selling 65 percent -- 55 million shares -- of its authorised but unissued shares.
The money will be used to fund acquisitions of new planes for route expansion, aimed at capitalising on opportunities created by enhanced regional integration and demand for freight services amid economic expansion.
Precision -- which contributed 77 million shillings to Kenya Airways' profit before tax for its year ended in March -- is 51 percent held by Tanzanian businessman Michael Shirima. Kenya Airways owns 49 percent.
"The dilution will result in Mr. Shirima's ownership declining from 51 percent to 34.6 percent, while Kenya Airways ownership will move from 49 percent to 34.2 percent," the firms said in a statement.
Precision wants to strengthen its regional position before taking on longer international routes in the next three to four years, its management said.
Titus Naikuni, chief executive of Kenya Airways, told reporters on a teleconference that three firms -- Stanbic, Ernst and Young and Kenya's NIC Capital -- have been shortlisted to offer transactional services during the IPO.
The number of passengers that both airlines feed into each other has grown in recent years, Naikuni said, adding it was imperative that Precision expand its fleet and routes.
"You can't just continue operating within Tanzania and survive," he said.
Precision said the number of passengers ferried by its planes has grown by 15 percent annually in recent years, while revenue has also grown by 10-15 percent during the period.
© Thomson Reuters 2010 All rights reserved
Kenya Airways says not selling its Precision stake | Reuters
Fri Jul 16, 2010 3:18pm GMT
By Duncan Miriri
NAIROBI (Reuters) - Kenya Airways will not sell any of its shares in Precision Air when the Tanzanian carrier offers stock to the public later this year, both companies said on Friday.
With an 85 percent market share, Precision is the main airline in Tanzania, which is east Africa's second-largest economy.
It wants to raise about $28 million by selling 65 percent -- 55 million shares -- of its authorised but unissued shares.
The money will be used to fund acquisitions of new planes for route expansion, aimed at capitalising on opportunities created by enhanced regional integration and demand for freight services amid economic expansion.
Precision -- which contributed 77 million shillings to Kenya Airways' profit before tax for its year ended in March -- is 51 percent held by Tanzanian businessman Michael Shirima. Kenya Airways owns 49 percent.
"The dilution will result in Mr. Shirima's ownership declining from 51 percent to 34.6 percent, while Kenya Airways ownership will move from 49 percent to 34.2 percent," the firms said in a statement.
Precision wants to strengthen its regional position before taking on longer international routes in the next three to four years, its management said.
Titus Naikuni, chief executive of Kenya Airways, told reporters on a teleconference that three firms -- Stanbic, Ernst and Young and Kenya's NIC Capital -- have been shortlisted to offer transactional services during the IPO.
The number of passengers that both airlines feed into each other has grown in recent years, Naikuni said, adding it was imperative that Precision expand its fleet and routes.
"You can't just continue operating within Tanzania and survive," he said.
Precision said the number of passengers ferried by its planes has grown by 15 percent annually in recent years, while revenue has also grown by 10-15 percent during the period.
© Thomson Reuters 2010 All rights reserved
Kenya Airways says not selling its Precision stake | Reuters