The Minister for Transport, Mr Omary Nundu, who officiated at the occasion when Precision Air Services (PAS) started share trading at Dar es Salaam Stock Exchange (DSE) last week, said it is worthwhile for the aviation industry and stakeholders to be reminded that air transport is not only good business for investors but it does contribute positively to the national economy. 

“The government has realized that an improved air service is critical to opening up the development of the economy that could contribute immensely to increased revenue,” observed Minister Nundu. 

As Tanzania offers favourable geographical position and its endowment with unique natural attractions, Nundu welcomed more investors to venture into the sector to boost its growth and contribution to the economy. 

He cited projects on card to rehabilitate and modernize airport infrastructure as Kagera, Kigoma, Arusha, Mwanza, the Julius Nyerere International Airport (JNIA) and Kilimanjaro International Airport (KIA). 

“This is a short term solution but the government is fully committed to ensure the aviation industry operates smoothly”, he said. He said the government is planning for long-term investments focusing on 50 years to come to accommodate the ever increasing demand for aviation services in the country. During the event, the PAS reaffirmed its commitment to enhance the performance and growth of the company to ensure realization of hefty returns on the investors’ money. “We are back to work and the task ahead is to enhance the performance of the airline in order to impress the present investors and attract new investments”, said Mr Shirima. 

He said the number of Tanzanians who took part in the Initial Public Offering (IPO) is a true testimony of the trust and confidence the public has in the company. “And most important of all are the investors who, with effect from Monday event have become shareholders of the airline”, he said. 

Mr Shirima said, the PAS shares started to trade on Wednesday at a price of 500/-, marking a good beginning at the secondary market. Shirima said a total of 7,056 investors took part in the IPO and the airline managed to raise 12bn/- subscribed by 43.18 per acent, most of which were taken by both local individuals and corporate entities as intended by the firm. 

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. 

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. 

Speaking earlier, the DSE Governing Council Chairman, Mr Pius Maneno, said PAS becomes the first airliner to be listed and second from purely private owned firm at the bourse. This, he said, implies the firm’s commitment not only serving the country but also to provide a chance for citizens to be shareholders.