Tanzanian regulator approves Precision Air IPO

DAR ES SALAAM: Tanzania's stock market regulator has given Precision Air, the country's biggest airline, approval for an initial public offering, to fund expansion through new routes and expanding its fleet.

The Capital Markets and Securities Authority also said on Thursday it was in the final stages of reviewing a planned IPO arising from the sale by East African Breweries of its 20 percent stake in Tanzania Breweries Ltd.

"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," CMSA chief executive Fratern Mboya told Reuters.

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

"We are currently reviewing EABL-TBL's application for an IPO. We have informed them to include additional information in their plan before we can give our final approval," said Mboya.

Orbit Securities is the lead advisor and sponsoring broker for both IPOs.

"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.

"We expect the TBL and Precision Air IPOs to be open to the market by early October."

The Dar es Salaam Stock Exchange has also approved the IPOs.

"It is up to the issuers, their adivsors 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."

Kitua expected the airline and brewery listings to invigorate trading on Tanzania's small stock exchange by transforming it into the region's biggest bourse in terms of market capitalisation.

"TBL is one of the most profitable companies in the listed securities, but has very few free float shares at the moment. The sale of the 20 percent shares through an IPO will unlock the true value of the company," he said.

"Precision Air will bring in new investors and will propel the growth of Tanzania's aviation industry."

London-listed African Barrick Gold , which has four gold mines in Tanzania, said on Wednesday it planned to cross-list on the DSE by the end of the year.

"We are extremely excited with more companies coming in with IPOs, investors will find more alternative investment areas to meet their appetite," said Kitua.

Copyright Reuters, 2011