Chobe acquires Kalahari Air Services
Isaac Pinielo | Tuesday March 8, 2016 14:06
Through its subsidiary, North West Air, Chobe will pay P19.5 million for Kalahari Air Services operations at Maun International Airport.
Kalahari Air is one of the two Aircraft Maintenance Operation (AMO) operating from Maun International Airport with a 50 percent market share.
On the other hand, North West Air has been a dormant subsidiary, which Chobe is resuscitating to own and operate the AMO.
A company statement said owning and operating the AMO will ensure that Chobe, which provides air transport to its camps and lodges, retains control of its aircraft maintenance and by extension ensure that air transport services are not disrupted.
The statement says Kalahari Air Services will maintain aircrafts owned by Safari Air, an air charter operator wholly owned by the Chobe Holdings. This is in line with the group’s vision to vertically integrate its operations.
Chobe Holdings owns and operates, through its wholly owned subsidiaries, eleven eco-tourism lodges and camps on leased land in Northern Botswana and the Caprivi Strip in Namibia.
Kalahari Air Services has owned and operated an air charter business and aircraft maintenance operations at both Sir Seretse Khama and Maun international airports for over 15 years.
The statement says it further says NWA will settle the acquisition price for the Maun operation through the Chobe Holdings’ internal cash resources, noting that the transaction does not require any debt or further equity financing.
According to the statement, the AMO has a market share of about 50 percent thereby placing it in a commanding position to provide positive revenue and cash streams to the group.
It says the AMO is properly licensed by the Civil Aviation Authority of Botswana (CAAB) thereby providing the group with access to instant revenue and cash flows through existing customers.
According to the statement, the AMO has been in operation for over 15 years and has a good safety record, a critical component of any aircraft business.
It says the fair value of the AMO’s net assets as at 29 February 2016 is estimated to be P19.5 million, representing 10.4 percent of the group’s net asset value as at 31 August 2015.
Given the cash outflow in settlement of the transaction, the group’s net asset value per share is expected to remain unchanged as a result of the transaction.
It is estimated that once the AMO’s operations are fully integrated into the group, and based on a profit contribution for a full financial year, the transaction will result in an increase in the group’s earnings per share of between 1.68 thebe and 1.94 thebe.