United Airways downgraded to Z category
The Dhaka Stock Exchange yesterday transferred United Airways to Z category from A category, as the private carrier is not in continuous operation for more than six months.
The Z category is an area for listed companies that are not in operation or do not hold annual general meetings regularly or do not declare dividends for shareholders.
As United Airways was placed in the Z category, its share price dropped 8.9 percent on the trading board. Each share of the airline traded between Tk 5.1 and Tk 5.5 before closing at Tk 5.1 on the DSE.
The airline's stocks will not be considered marginable securities anymore. A marginable security means a stock that can be purchased on margin loans provided by brokerage houses and merchant banks. “Stockbrokers and merchant bankers are requested to abstain from providing loan facility for purchasing any security of United Airways,” the premier bourse said in a web posting.
Flights of United Airways have been suspended since March 5 due to unavailability of serviceable aircraft.
The aircraft were grounded for maintenance, but the airline did not have enough funds to do the required servicing, which can be a costly exercise.
However, the lone listed airline is in the process of raising Tk 400 crore from two foreign firms and a local aviation company through private placement to purchase aircraft and repay loans.
United Airways is set to issue 40 crore ordinary shares of Tk 10 each to Singapore-based Swift Air Cargo Pte Ltd and Phoenix Aircraft Leasing Pte Ltd, and Bangladesh's TAC Aviation Ltd. Established in 2007, the airline has 11 aircraft in its fleet: two Airbus 310-325, five MD-83, three ATR-72-212 and a Bombardier Dash-8 100.
It has permission to operate domestic flights to Chittagong, Sylhet, Jessore, Cox's Bazar, Rajshahi, Barisal, Saidpur and Ishwardi. On the international front, it has permission to fly to Dubai, Kuala Lumpur, Kathmandu, Kolkata, Jeddah, Bangkok, Muscat and Singapore.
Earnings per share of the airline during the July-December period of last year were Tk 0.07, which was Tk 0.39 a year earlier. Listed on the stock exchange in 2010, the airline's market capitalisation stands at Tk 384.88 crore.
Sponsors hold only 5.02 percent stake in United Airways, institutions 17.43 percent and general investors the remaining 77.55 percent.