Comair to raise R124.5m

Johannesburg - Comair is to raise R124.5m by way of a fully underwritten renounceable rights offer of 69.176 million new Comair ordinary shares of 1c each, it said Thursday.

The rights offer shares will be issued at a share price of 180c per share in the ratio of 14 rights for every 100 Comair ordinary shares or 'A' ordinary shares held.

The company said the proceeds would be used as the initial down payment to Boeing for the acquisition of the new fleet of aircraft. The balance of the funding for the new fleet will be raised from existing debt markets and existing cash resources.

Comair recently announced its intention to upgrade a portion of its fleet to the next generation Boeing 737-800 aircraft. The planned upgrade will contribute to operational efficiency and environmental sustainability, it said.

Comair has been able to secure favourable pricing from Boeing for the acquisition of these aircraft, with intended delivery dates from 2011 to 2015.

BB Investment Company, a wholly owned subsidiary of The Bidvest Group (BVT), has agreed to fully underwrite the rights offer for an underwriting fee of 4% of the amount underwritten, Comair said.

- I-Net Bridge