Arik Air set to expand route with $1bn share offer in Lagos, London
Arik Air, one of the top airlines in Nigeria plans to raise about $1billion share offers through a Private Placement with an Initial Public Offering (IPO) in Lagos and London respectively by next year.
Disclosing this development, Managing Director, Arik Air, Mr. Chris Ndulue said that the fund was needed to expand the airline’s routes network across the world, stressing that more investors were needed to help grow the business.
He said that Arik Air, which was founded ten years ago and is now West Africa’s biggest airline by passenger traffic, had appointed advisers for the share placement and potential IPO in Lagos, with a secondary listing in London.
“What we plan to do is first put up a private placement which will bring in a few new shareholders, then one year or 18 months down the line we can do an initial public offer.
“We are looking at something in the neighbourhood of $1 billion for both private placement and IPO,” Ndulue said.
According to the Arik Air MD, the airline will start it daily flights operations to New York up from three times a week, and also fly to Rome and Paris within 18 to 24 months, adding that the carrier, which has a total of 28 fleet of aircraft, flies mainly within Western and Central Africa, as well as to London and Johannesburg.
He further stressed that the new routes would help the company generate some foreign currency, pointing out that some domestic and international carriers have struggled with the plunge in the naira that has made bills for imported jet fuel ever more expensive and also hurt profit margins as many passengers pay in naira.
The Lagos stock market, which is down 4 percent in local currency terms this year and at a 15-year low in dollar terms, has not had an IPO since 2009 due to sluggish appetite from foreign investors.
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