United Airways aims to fly again (No not that United)

Dino D'Amore
By Dino D'Amore June 2, 2016 17:05

United Airways aims to fly again (No not that United)

United Airways will raise Tk 400 crore from two foreign investors and a local aviation company to purchase aircraft and repay loans it has been announced. This will help the Bangladeshi airline resume flight operations that remain suspended since March 5, 2016 after the airline could not fund essential maintenance requirements.

United Airways will raise the funds by issuing 40 crore ordinary shares of Tk 10 each to Singapore-based Swift Air Cargo and Phoenix Aircraft Leasing, and Bangladesh’s TAC Aviation. The airline yesterday got approval from Bangladesh Securities and Exchange Commission to raise the funds through private placement, according to a statement.

The stock market regulator also imposed three-year lock-in on the United Airways’ shares for Swift Air Cargo and one year lock-in for Phoenix Aircraft and TAC Aviation. The lock-in on shares means these cannot be sold or transferred within the stipulated time.

Established in 2007, the airline has 11 aircraft in its fleet: two A310-325, five MD-83, three ATR-72-212 and a Dash-8 100. Its net operating cash flow was only Tk 0.26 during the July-December period of last year, down from Tk 0.40 a year earlier.

The airline has permission to operate domestic flights to Chittagong, Sylhet, Jessore, Cox’s Bazar, Rajshahi, Barisal, Saidpur and Ishwardi. On the international routes, it has permission to fly to Dubai, Kuala Lumpur, Kathmandu, Kolkata, Jeddah, Bangkok, Muscat and Singapore.

Listed on the stock exchange in 2010, the airline’s market capitalisation stands at Tk 446 crore. Sponsors hold only 5.02 percent stake in United Airways, institutions 17.43 percent and general investors the remaining 77.55 percent.
This airline could be a goldmine if run with a low-cost base as an international carrier.

(1 Bangladesh, Taka = 0.0127195 USD – Crore = multiply by 10M)
Dino D'Amore
By Dino D'Amore June 2, 2016 17:05