Comair is to become the first South African carrier to seek a listing, and is to debut on the Johannesburg Stock Exchange this July.
Comair's chairman, Dave Novick, hopes the listing will value the company in excess of R1 billion (US$200 million). A prospectus was expected to be issued in June. The airline operates under a franchise agreement with British Airways and owns 25 per cent of fellow South African carrier Sun Air.
Funds raised from the listing will be used mainly for fleet replacement. Comair operates six Boeing 737s, all of which it owns, and three leased 727s. It plans to acquire a further two 727s within the next year. It is planned that 30 per cent of the issued capital will be held by the public, institutions, empowerment groups and certain qualifying travel trade partners and BA Executive Club members. This will leave 37 per cent owned by management, 5 per cent by staff, 11 per cent by current private investors, and 17 per cent by Gensec NSA Equity Fund, which currently owns 28.5 per cent of the company.
'The agreement stipulated that we would list after reaching a particular level of profit. We have now exceeded that level by 40 per cent,' says Novick.
Because of the increase in tourism the South African airline industry is set to grow by 6 per cent annually over the next three years. Comair hopes its market share will grow by 1.5 percentage points a year. Comair, which operates 250 flights a week out of Johannesburg to Cape Town, Durban, and Port Elizabeth, recently introduced services to Zimbabwe and Namibia and is considering expansion in sub-Saharan Africa and the Indian Ocean islands.
Source: Airline Business
