(by Ugonna Maduagufor)

As a result of the recent October 29^th ADC’s Boeing 737 plane crash, the Nigerian aviation industry and air space at large is now globally perceived as being unsafe for air travelers generally and of course a very risky investment arena. Sultan Maccido, a key Muslim spiritual leader and 96 other passengers were not spared by the infamous incident. The other side of the sorrowful coin is the bleak fate of the Nigerian aviation industry stakeholders especially the capital investors and most precisely the subscribers to the Aviation Development Company plc’s recent dual public share offer.
Generally, stock investors are driven by perception especially in the Nigerian context and the aviation industry performance being very capital intensive and sensitive is not very fashionable to the quick reward oriented Nigerian stock investors. Not long ago in September 13^th, 2006 the ADC plc being one of the only two aviation companies currently listed on the Nigerian Stock Exchange floor came to the public market with a dual share offer worth N2.4 billion including preference and ordinary shares both for 50k at N1.00 each, primarily to acquire four new air planes and clear the effects of her debts due to the 1996 air crash also involving an ADC air flier Boeing 727. The airline was forced to go for a break from year 2000 to 2002 due to her previous 1996 air accident. Again the aviation minister has announced a suspension of the airlines license, a further blow to the precious investors of the recent public offer who are yet to receive the share certificate. The share price of the quoted duo of Albraka plc and ADC plc in the aviation sector had been nothing to write home about, and almost persistently dormant with little or no trading activities.
Some investment analysts are of the opinion that all hope is not lost for the aviation industry players if they can merge to provide safer and more efficient services to the Nigerian local passengers that would traditionally pay more for safety. Again, any foreign aviation giant that can come into the market with new planes and efficient services would most likely carry the market.

(No Ratings Yet)

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This entry was posted on Tuesday, October 31st, 2006 at 2:15 am and is filed under Stock Market News. You can follow any responses to this entry through the RSS 2.0 feed. Tags: Aviation Development Company
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