Mixed feelings greet Medview Airlines’ listing on the NSE

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Medview Airlines is preparing to list its ordinary shares on the Nigerian Stock Exchange, NSE.

The news is a positive one as Medview will be the only airline listed on the NSE since the delisting of ADC Airlines and Albarka Airlines.

With a market capitalisation of NGN14.63 billion, the airline said it will list NGN9.75 billion ordinary shares of 50 kobo each at NGN1.50 per share.

Medview will be listing by introduction which means it will list shares held by its shareholders who will in return will get cash for their holdings.

However, the airline might not get a big celebration to welcome its listing. Nigeria’s aviation industry has been a mix story of disappointment for passengers and complains from companies in the sector.

Arik Air, the largest domestic airline with international operation has been wobbling and fumbling. The airline with its largest fleet of planes has not deemed it fit to list on the NSE. Its battered image is one of its albatross as well as its epileptic management system.

The listing of Medview is good idea, however, investors will be weary as a result of various risks confronting the sector. ADC Airlines went bankrupt after an accident which triggered a sell off by its investors.

Adegbenro Bello of Glastnotsfinance.com said “The planned listing of Medview Airlines on the Nigerian Stock Exchange is a welcomed development, in view of the lack of fresh listing in the recent past. This will no doubt deepen the market and also enhance the company’s visibility. Medview airlines have endeared itself to air travellers within a short while with their quality service, they can also transfer this goodwill to the exchange by consistently posting impressive performances”.

Moreover, analysts advise that apart from raising money on the NSE, an airline will need to diversify its source of capital. A combination of bonds and other low risk options for investors.

Medview is likely to get a cold shoulder, however, the time will come when investors might consider giving the stock a second look. The airline can do this by showing a track record of good corporate governance, tidy financials and positive earnings, no matter how modest.

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