Tanzanian's are very retrogressive,i heard that a kenyan living in tanzania is the only eligible participant,as we cry to get foreign investors tz chases them away.

Whose share is being diluted? The Tanzanians or KQ's?

PW is issuing authorized but unissued shares, which will have the effect of reducing KQ and Mr Shirima stakes. KQ will go down from 49% to slightly over 31%.

The objectives of the issue are 1. Capital for fleet renewal and 2. Involvement of TANZANIANS in the airline.

While KQ's holding will be reduced, the effect is that there will be more cash available to PW, meaning the KQ's share will be more valuable in the long run. The effect of the second objective will possibly be more use of the airline by Tanzanians, thereby increasing profits.

Bottom line - it is not a bad thing.

KQ is not cashing out. The shares to be sold are 'new' shares thus diluting KQ & Shirima's stake [Note: I have no idea whether Shirima is selling his shares]

I may be mistaken but I think the idea is per @GG

1. Capital for fleet renewal
2. Involvement of (more) TANZANIANS in the airline (ownership)

Why?

1. Tanzania is HUGE. It is tough to move around the country by road so flying is popular (for those who can afford it).
2. Tanzanians are xenophobic about Kenyans. The dead Air Tanzania has been designated a National Airline & the same courtesy was not accorded to 'larger' PW. I do not know the current status.

As a National Airline, PW can access routes subject to bilateral agreements i.e. more destinations are opened.

Many Tanzanians DIRECTLY fly to Dubai, London, etc & they use BA, Emirates, etc but now PW can compete in this market. KQ will lose some traffic but OVERALL the gain is higher to the KQ/PW combo.

Another advantage is that if there is a delay on a KQ flight from Dubai-Nairobi, you can use PW from DBX-DSM-NBO instead of being 'stuck' in Dubai or being put on Emirates.

PW can pass too..last year they made a los...

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Its now or never, the Tanzanians have dragged this on for 2 years.

Folks - Just general comments.

Sometimes firms growth is in the future not behind them. The overall profitability [not just one year] is what counts.

I learnt that with EABL which had a terrible year sometime in the 90s. It was a consolidation year with lots of problems. They did a Rights which Kenyans eschewed. The next 3 years for EABL were WONDERFUL... The Rights Price seemed a super discount at that point!

Of course, management matters...

A firm I wish I had invested in was (loss-making) Apple - just 4-5 years ago... Windows was still strong. People were dissing the iPod as an expensive toy. Competitors were coming out with their cheaper versions.

Then came the iPhone. Critics all over. Expensive. Who wants a touchscreen. Businesses will not buy iPhones. Blackberry will kill them.

The iPad. Even more critics. They criticized the price, the size, some called it a larger iPod. Today Apple sells more iPads (Tablets) than ALL other manufacturers COMBINED.

Even the Apple laptops are now in the top 3 sellers. Yes, even though more Windows computers are sold but Apple is a top brand vs Dell, HP, etc.

Precision (& KQ) are banking on the future of Africa. I see PW being used by KQ as its arm to service many smaller Southern Africa destinations while KQ concentrates on the larger cities in Central, West & North Africa.

The 787s will help open more Asian destinations. I have a feeling KQ will lease 1-2 787s to PW as well.

@thedeal - Apple was just an example on how a visionary (& smart) management can turn the fortunes of a loss-making firm no matter what sector! Look at RyanAir, AirAsia or SouthWest vs their competitors!

I believe PW has its own 'future' independent of KQ. It will remain a key plank of KQ's foray into Tanzania but PW is banking on the Tanzanians flying internally + internationally.

I'm buying a certain bank in a certain African country i recently visited just because a certain company (which i respect) bought a majority stake in the business..the Company was subject to a hostile take over bid from ABSA/Barclays recently..now that company costs less than Eveready with revenues the size of DTB..yes its been loss making for the past 2 years!

Now back to PW, the later has alot of factors going against it:-

1. Competition-the competition on the local and domestic routes is fierce even KQ has/is taking a beating
2. Lack of a Commercial Hub-KQ has JKIA while Emirates has Dubai if you look at the most successful airlines, the precense of a strong hub has been a contributing factor unfortunatelly Dar has not lived at his billing
3. Lack of Government Support-for PW to expand into Africa it needs to leverage on the Tanzanian Governments diplomatic shuttle..KQ has been ggod at that.
4. KQ-for PW to be great..they have to enter into Africa where the yields arethe highest...that means going against KQ.

RSE a wake up call for DSE.