Government bodies banned against buying Precision Air shares

THE Government has instructed its financial institutions such as pension funds and its related agencies not to buy the Precision Air shares currently being traded by the locally registered stock exchange brokers in the country. Impeccable sources says that, the government has circulated letters to respective registered brokers of the Dar es Salaam Stock Exchange {DSE} not to allow any purchase of the said shares of a privately owned airline and instead should direct their purchase to the ill fated Air Tanzania corporation which is about to be listed in DSE market. According to the sources, the move aims to save the national airline which is in danger of collapsing and probably loose the local market share which it had been dominating since the collapse of the East African Community in 1977. An economist who preferred anonymity said that, the banning is like the interaction of the free market economy under which the government is currently operating. Despite the government' decision, sources from within the company says that, the IPO earlier announced by the company in early October to the general public, has increased to over 6,000 from the minimum estimates of 1,000 of the first quarter of a trading period. Days after the Precision Air services limited floated its shares on the DSE in an initial public offer, the pace has finally quickened with more and more local investors getting in on the action. The Precision air company which began opPrecision Air at Julius Nyerere International Airport in Dar es SAlaam.
eration in the country in early 2000 has of late become the leading and a sole airline service provider in the country. It is the first local private airline to be listed with DSE and it targets to net proceeds of Tsh. 26 million via the IPO route which will be used for further expansion, strengthening and diversifying of its equity base.

Precision Air at Julius Nyerere International Airport in Dar es Salaam.

According to the company's Board Chairman Michael Shirima, a minimum of 51 percent of the shares offered to the public at Tsh 475 a piece is offered to Tanzanians. The remaining 49 percent has been allotted to both Tanzanians and non Tanzanians. He further stresses that, three percent of the shares on offer numbering 1,765,253 shares in all have been reserved for the company. Economic sources in the country maintains that, the listing of Precision Air services shares helps the firm to access a wider range of financing options for future growth such as issue of additional equity, enhanced credit rating with banks and other lending institutions, as well as the opportunity to issue corporate bonds through DSE and other capital market instruments. The airline is focused on developing a portfolio of routes which have the potential to deliver consistently high passenger load factors at attractive yields. The airline also wants to improve its competitive edge by being majority bowed Tanzanians nationals whom would enhance customer loyalty within the country and the East African region as a whole. With a focus on route profitability and commitment to a disciplined private business model, Precision Air Company aims to establish an airline in markets where it believes its expansion and majority ownership business model has exceptional potential for sustainable profitability. Based on other successful privately owned airlines operating in other countries, the Precision Air business models involves scrutinizing every single aspect of the business tPrecision Air at Julius Nyerere International Airport in Dar es SAlaam.
o remove non essential costs.