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Tuesday, March 24, 2009

United Airways to go public this year

Private carrier United Airways plans to raise Tk 100 crore through an initial public offering (IPO), evidence of becoming the first listed airline in Bangladesh stock market.

The airline will use the capital in expanding its horizon in international flight operations, officials said.

“We hope we can float our shares on the stock market within this year,” Tasbirul Ahmed Choudhury, chairman and managing director of United Airways (BD) Ltd, told The Daily Star yesterday.

Another senior official of the airline however said it plans to go public by October.

“We have already appointed AAA consultant and financial advisers as underwriter and issue manager,” he said, adding that the company will purchase an aircraft to run it on international routes.

The face value of each share will be Tk 100.

Welcoming the move, market experts said it will be a milestone for Bangladesh's capital market, as such listing is the first time for a an airline here.

“The initiative will increase the market depth besides bringing about a structural change,” said Professor Salahuddin Ahmed Khan of the Finance Department at Dhaka University.

It also proves that the stock market can act as a financing industry, he said.

“The regulators, market authorities, investors and other stakeholders should provide support to the airline so that it can easily be listed with bourses,” he added.

The United Airways, a venture of non-residents Bangladeshis (NRBs), has already planned to expand its global operations and is expecting to fly to new destinations, including the Gulf aviation hub of Dubai, Kuala Lumpur and Kathmandu, by mid-2009.

A 170-seater MD-83 aircraft for $9 million (Tk 62 crore) will be added to its existing two-carrier fleet by May. Earlier, the airline purchased two Dash 8-100 aircraft for about $8.5 million (Tk 57 crore) each.

The carrier recorded a turnover of about Tk 41 crore in 2008 and targets a Tk 140 crore turnover this year.

United Airways, which entered the domestic aviation market in July 2007, has some 500 shareholders, 95 percent of which are NRBs living in the UK. It started its domestic passenger flights on July 10, 2007 and presently operating on Dhaka-Sylhet, Dhaka- Chittagong, Dhaka-Cox's Bazar, Dhaka-Jessore and Dhaka-Barisal routes.

It entered into the international arena on September 24, 2008 by launching its Dhaka-Kolkata flight.

The private sector airline on Sunday announced that it is scheduled to begin operations on the Chittagong-Kolkata route from March 30 to cater to the growing needs of the residents of the port city.

At a press meet in Chittagong, the airline officials said the company eyes to stretch its wing further in the next five years with an investment of Tk 2,000 crore. In order to meet that challenge, it plans to begin operations on the Dhaka-Kathmandu, Dhaka- Kuala Lumpur, Dhaka-Dubai and Chittagong-Bahrain routes very shortly.

The Daily Star



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