Precision Air (PW, Dar-es-Salaam) has appointed a Dubai-based consultant to help it locate and attract a suitable foreign partner capable of shoring up the struggling carrier's finances. In an interview with the East African newspaper, Precision Air chairman Michael Shirima said the consultant had been enlisted after shareholder Kenya Airways (KQ, Nairobi Jomo Kenyatta) deferred a USD10million capital injection.

Though Precision Air had met conditions set down by the Kenyan carrier to qualify for the funding, it had been told to wait as Kenya Airways reportedly had to resolve other pressing internal issues before payment could be made.

Among the Kenyans' conditions included either selling off or arranging a sale/leaseback agreement on five of its aircraft (two ATR42-500s, two ATR42-600s, and five ATR72-500s), retrenching more than a fifth of its staff, outsourcing some functions, and drawing up a debt-reduction plan while improving cash flow.

In the wake of the delay, Shirima said the consultant will seek an interested company which is capable of immediately injecting between USD40million and USD75million in “any form which is not a loan. It can be shareholding, quasi-shareholding or mezzanine funding.”

“We need between USD40million and USD75million from an investor; we will spend that money to pay some of our debts and inject the other into our operations,” he said adding that the sale and leaseback of the five Avions de Transport Régional aircraft could earn the carrier an estimated USD80million.

In return for their funding, the investor will get an undisclosed shareholding in the Tanzanian domestic operator, Shirima said.

Following a failed IPO on the Dar es Salaam stock exchange in early 2012, Precision Air has struggled to contain soaring costs attributed mostly to a volatile Tanzanian Shilling and jet fuel prices. As part of cost-cutting measures, the airline has switched to an all-turboprop fleet with the bulk of its regional routes having been discontinued. The carrier ended its Moroni Int'l operations in late September leaving Nairobi Jomo Kenyatta as its only remaining international destination.