Oil
Mexican Airline Viva Aerobus Seeks to Raise About $200 Million in IPO
MEXICO CITY — Mexican low-cost airline Grupo Viva Aerobus aims to raise some $200 million in an initial public offering of shares in the Mexican market, as local carriers seek capital to widen their presence in a market with potential for expansion.The no-frills carrier expects to price up to 113 million shares Tuesday at 21 Mexican pesos ($1.58) to 25 pesos each, according to a prospectus filed with the Mexican Stock Exchange. The shares would debut on the Mexican stock exchange Wednesday. Barclays Mexico is the global coordinator on the deal.
The offering follows competitor Volaris Aviation Holding Co.’s $346 million initial public offering in September, with both airlines highlighting that Mexico’s air travel market has much room to grow, since far fewer Mexicans fly each year, compared with Americans.
Lower fares from carriers like Viva Aerobus are opening air travel to a wider segment of the Mexican population. Viva Aerobus sees potential to grow air travel as many passengers are willing to pay a small price premium to ditch long-haul bus trips. Mexicans take an estimated 2.7 billion intercity bus rides each year, according to government data, making Mexico one of the biggest markets for bus travel in the world.Viva Aerobus’s fleet of 19 planes transported around 3.8 million passengers last year. The airline operates 49 routes across Mexico, and one U.S. route between Monterrey and Houston.
The airline started operations in Mexico with two aircraft in 2006 as a partnership between Grupo IAMSA, Mexico’s largest bus company, and Irelandia Aviation, an investment vehicle backed by the co-founder of Irish discount carrier Ryanair Holdings PLC. Proceeds from the share offering will help renovate and expand the Viva Aerobus fleet, pay down debt and fund general corporate purposes, the company said.
The prospectus boasts that prior carriers backed by Irelandia Aviation have generated average returns of 22% following their share offerings. In addition to Ryanair, Irelandia has backed Allegiant in the U.S. and Tiger Airways in Singapore and Australia.
Viva Aerobus said its passenger traffic grew at an average annual rate of 17% between 2007 and 2012, while plane manufacturer Airbus predicts Mexico’s total air traffic volume will grow annually by an average of 5.2% through 2031, versus average annual global growth of 4.7%.Per capita gross domestic product in Mexico already exceeds the global average by 23%, according to World Bank data, and the country’s middle class is poised to grow, Viva Aerobus noted.
The company has filled a niche by operating routes between secondary cities, allowing passengers to avoid connections at the country’s busy primary airport in Mexico City. The carrier targets price-conscious leisure travelers, such as Mexicans visiting friends and family, and small businesses with limited travel budgets.
Viva Aerobus’s top management is stacked with global airline veterans. Chief Financial Officer Alan Bird, for instance, held the same post at British Midland Airways and Tiger, while Chief Operating Officer Robert Zoller has worked at Hawaiian Airlines, AirTran Airways and American Airlines.
The company said it generated an operating profit of 203 million pesos ($15 million) during the first nine months of 2013 on revenue of 2.87 billion pesos.
– WALLSTREET JOURNAL
In a strategic move to revitalize Nigeria’s oil and gas sector, the Federal Government has unveiled two key fiscal incentives aimed at attracting investment and enhancing energy security.
The announcement was made by Mr. Wale Edun, the Minister of Finance and Coordinating Minister of the Economy on Wednesday.
The first initiative, the Value Added Tax (VAT) Modification Order 2024, introduces critical exemptions for essential energy products and infrastructure, including Diesel, Feed Gas, Liquefied Petroleum Gas (LPG), Compressed Natural Gas (CNG), Electric Vehicles, Liquefied Natural Gas (LNG) infrastructure, and Clean Cooking Equipment.
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These exemptions are designed to reduce living costs for Nigerians, promote energy security, and accelerate the transition to cleaner energy alternatives.
The second initiative, the Notice of Tax Incentives for Deep Offshore Oil & Gas Production, offers new tax relief options for deep offshore exploration projects.
This measure aims to position Nigeria’s deep offshore basin as a premier destination for international oil and gas investments, boosting the country’s appeal to foreign investors.
These reforms are part of a broader set of policy initiatives, known as Policy Directives 40-42, endorsed by President Bola Ahmed Tinubu.
The directives reflect the administration’s commitment to fostering sustainable development in the energy sector and enhancing Nigeria’s competitive edge in the global oil and gas market.
By Yemie Adeoye
NIGERIA’s President Bola Tinubu has announced that the protracted ExxonMobil-Seplat upstream oil divestment will be formally approved by the Minister of petroleum within a matter of days, just as he announced his government’s intention to expand the Compress natural Gas, CNG buses initiative.
The President who stated this during his Independence day nationwide broadcast stated that the move is in line with his administration’s commitment to free enterprise, free entry and free exit in investments which is the hallmark of his administration investment policy.
“Fellow compatriots, our administration is committed to free enterprise, free entry, and free exit in investments while maintaining the sanctity and efficacy of our regulatory processes. This principle guides the divestment transactions in our upstream petroleum sector, where we are committed to changing the fortune positively. As such, the ExxonMobil Seplat divestment will receive ministerial approval in a matter of days, having been concluded by the regulator, NUPRC, in line with the Petroleum Industry Act, PIA. This was done in the same manner as other qualified divestments approved in the sector.”
The President also seized the opportunity to plead with Nigerians to be patient with his administration’s reform policies. “As your President, I assure you that we are committed to finding sustainable solutions to alleviate the suffering of our citizens. Once again, I plead for your patience as the reforms we are implementing show positive signs, and we are beginning to see light at the end of the tunnel”.
“Our energy transition programme is on course. We are expanding the adoption of the Presidential Initiative on Compressed Natural Gas for mass transit with private sector players. The Federal Government is ready to assist the thirty-six States and FCT in acquiring CNG buses for cheaper public transportation.
Fellow Nigerians, while we are working to stabilise the economy and secure the country, we also seek to foster national unity and build social harmony and cohesion. Our economy can only thrive when there is peace”. he enthused.
As part of the administration’s push to improve Ease of Doing Business (EoDB), Nigeria’s Vice President Kashim Shettima has expressed support for ExxonMobil’s plan to invest $10 billion in the country’s deep-water oil sector.
Speaking on Wednesday, September 25, 2024, during a meeting with ExxonMobil executives at the 79th United Nations General Assembly (UNGA) in New York, Shettima called the investment “a clear testament to the administration’s economic reforms and investor-friendly policies.”
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This announcement follows news that international maritime company DP World intends to develop a multibillion-dollar port project in Nigeria.
Stanley Nkwocha, Senior Special Assistant to the President on Media and Communications, shared the development in a statement on Wednesday. He quoted Shettima as saying: “ExxonMobil’s potential investment aligns with the vision of President Bola Ahmed Tinubu’s administration for a more investment-friendly Nigeria.
We are committed to fostering an environment that supports such transformative projects.”Shettima also discussed the administration’s broader efforts to improve the ease of doing business, highlighting the “Renewed Hope Agenda,” which aims to simplify bureaucratic processes, enhance transparency, and offer fiscal incentives to attract global investors.
“Our administration has taken bold steps to unify the exchange rate, remove fuel subsidies, and implement tax reforms. These measures, though challenging in the short term, are intended to create a stable and predictable business environment in the long term,” he added.
On the oil and gas sector, Shettima mentioned that the government is revising the fiscal framework for deep-water operations to attract investment while ensuring fair returns for the Nigerian people.
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