Fastjet says it plans to raise $40 million to increase its equity base

Harare – Low cost carrier, Fastjet, announced a fundraising and equity refinancing aimed at increasing its equity base by at least $40 million.

In September the Budget airline said it needed more cash within a month to continue operating.

Fastjet, whose shares lost more than half their value after September’s announcement, said the steps would significantly reduce its debt and provide the company with working capital until the end of 2019.

The airline, which operates in Tanzania, Zambia, Zimbabwe, Mozambique and South Africa, announced soon afterwards that it had raised $11.5 million through a placing of 898.4 million shares.

In a statement, CEO Nico Bezuidenhout said operations in Zimbabwe and other African countries are on track.

“Business in our continuing operations in Zimbabwe and growth-markets of South Africa and Mozambique is on the right track.

“In addition to the placing, Fastjet’s largest shareholder Solenta Aviation agreed to subscribe 316.7 million shares of Fastjet, raising $4.1 million and increasing Solenta’s stake in the company to 54.3 percent from 29.8 percent.”

Bezuidenhout also said the airliner will also issue 1.91 billion shares valued at $24.4 million to acquire four Embraer 145 aircraft from Solenta and to settle the majority of Solenta long-term loans to the company.

In addition, Fastjet also proposed an open offer to raise up to $5.3 million.

Fastjet, launched in 2012 and modelled on the likes of no-frills airlines easyJet Plc and Ryanair Holdings Plc, has been running short of cash for more than two years.

Easyjet founder Stelios Haji-Ioannou also helped found Fastjet.

Fastjet, commenced daily flights between Harare and Bulawayo beginning July 20, in tandem with a Government decision to allow local aviation firms to also ply domestic routes.

Only local airlines such as fastjet and FlyAfrica Zimbabwe have been allowed to ply local routes.

In the past, domestic routes were preserved for national airline, Air Zimbabwe.

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