Precision Air in talks to trade debts for equity with Tanzanian government
Following the yearly financial statements of Precision Air being released a week ago to the shareholders as well as to the general public, they revealed considerable improvements over the last year, emerging information reveals that this airline is having talks with the government of Tanzanian to trade its accumulated financial-debts for equity.
One of our sources who is close to this airline has revealed that a number of charges and costs have accumulated and , in case the government of Tanzanian accepts this deal, could bring substantial financial relief to the airlines.
One of the key shareholders of the airline, Kenya Airways, is as well thinking of the injection of more capital into this Precision Air, following the selling off a large percentage of its share in the IPO back in 2012. That deal on the other hand is determined by Precision Air accelerating the recovery from being a loss maker into becoming a profit maker.
As stated a week ago when verifying the yearly financial results, are strategies in progress at Precision to trade a number of its ATR aircraft after which they lease them back, that would return more required money into the coffers of the company. Additional cost saving strategies are as well being thought about, such as additional outsourcing of a number of services.
Precision, other than the routes to Kilimanjaro, Mwanza, as well as Zanzibar from Dar es Salaam, covers a number of secondary airports throughout the country and in a number of cases provides the only flight alternative to the public to get to such destinations on scheduled services, an idea supported by the use of ATR 72 plus ATR 42 turboprop aircraft that are in a position of serving airfields with lesser runway lengths.
Tanzania Aviation has been affected by operations that make losses, with Air Tanzania an excellent example, despite the fact that Precision’s primary local rival across the routes to Mbeya, Mwanza plus Kilimanjaro Fastjet, is additionally still writing crimson balance sheets in accordance with their previous financial annual results. Time without doubt will tell what steps will be applied, however Precision plus the other airlines, plus how effective these measures could be to return them to earnings territory.
Precision Air is cited on the Stock Exchange of Dar es Salaam, Fastjet’s controlling company is cited on the Stock Exchange London making the two carriers liable under the public company standards whereas Air Tanzania as one of the parastatal companies isn't publishing financial data to the general public directly, a good reason possibly why it was able to stack up a huge mountain of debt that has previously severally frightened potential investors. Keep in touch with us for more updates about the aviation business in the Eastern African region.