Why Med-View airline opts to go public, to sell N9.75b shares
Med-View Airlines is set to go public tomorrow to tap into the anticipated growth of domestic airlines operations in the country, The Guardian has learnt.
The airline, being one of the two flag carriers of Nigeria, will be “Listed by Introduction” on the Nigerian Stock Exchange (NSE) on January 31, 2017, would be the first airline to list its shares on the stock exchange in the last 10 years.
By the listing and sales of shares to members of the public, the airline would have access to the needed capital inflow to run more efficiently and improve confidence of investors. Besides, shareholders would also have a say in the running of the airline, while the risk of ownership is spread among the shareholders as well.
Sources at the stock exchange hinted that Med-View Airline would be listing N9.75 billion ordinary shares of 50 kobo each at N1.50 per share, indicating a start-off market capitalisation of N14.63 billion.
Executive Director, Business Development, Med-View Airline, Isiaq Na-Allah, said that this the growth projection and market forecast informed the airlines’ decision to be listed on the Nigerian Stock Exchange to give members of the public the opportunity to be part of the airline through share holding.
The yearly passenger traffic currently put at 15 million nationwide has been estimated to improve with the Federal Government’s plan to concession airports nationwide.
The Minister of State for Aviation, Hadi Sirika, the chief advocate of airport concessioning, recently quoted figures from the International Air Transport Association (IATA), International Civil Aviation Organisation (ICAO) and others, showing that the sector is growing at the rate of five per cent per annum and doubling every 15 years.
Sirika said once the potential of air transport business in Nigeria is well harnessed, “the figures will quadruple; multiply four times, which means that from the onset, once these airports are in place and the carriers are flying, we will multiply 15 by four and that is 60 million passengers.”
Industry watchers described the move by Med-View as a bold step and smart move in the right direction, to improve their chances of becoming a major player in the industry and also in the anticipated boom.
Abayomi Adegbite, an engineer, said that the public listing would put an end to “the era of one-man management board” that has the bane of most of the airlines and their weakling posture.
Adegbite and others were unanimous that in addition to the prestige a company gets with listing on a stock exchange, the company will be able to raise additional funds through the issuance of more stock to emerge stronger and stock options programmes can be offered to potential employees, making the company attractive to top talent. Listing companies also have additional leverage when obtaining loans from financial institutions.
The Guardian learnt that Kedari Capital Limited and Trustyields Securities Limited are the financial Advisers/issuing House and Stockbrokers to Med-View Airline in respect of the listing exercise.
Spokesperson of the airline, Obuke Oyibotha, noted that the airline’s forays into pilgrims airlift has revolutionised pilgrims handling and airlift in Nigeria and the West African sub-region.
“Today, Med-View is the benchmark and the airline of choice when it comes to Hajj operations in Nigeria. The National Hajj Commission of Nigeria (NAHCON) ranks Med-View number one for hitch-free hajj operations.