Solenta, a Johannesburg based commercial aviator, is to become a 28% shareholder in Fastjet with a US$19.2mln equity arrangement and it has contracted the AIM quoted group for services.
Through a separate placing Fastjet is raising US$28.8mln from its major institutional shareholders. The new shares are to be priced at 16.3p each, which is a 2% discount to Wednesday’s closing price.
Fastjet’s interim chief executive Nico Bezuidenhout told investors that these arrangements will allow the company to finalise its stabilisation plan.
“Our agreement with Solenta represents a good operational and strategic fit. It provides fastjet with access to fleet and related services which, together with the funds raised through our proposed placing, will allow us to successfully implement the final stages of our stabilisation plan,” Bezuidenhout said.
“We have made good progress with the plan and the near-term priority continues to be to fully stabilise the business and to reach cash flow break even by the fourth quarter of this year.
“As well as helping us to achieve this objective, the fundraising and Solenta agreement will also provide the platform from which to flexibly and cost-effectively pursue fastjet's medium to long-term objective of becoming the first truly pan-African low-cost airline."
Solenta has a fleet of 49 aircraft which are managed under air operator certificates (AOC), and as part of the new arrangement Fastjet will also be given access to aircraft leases.
Fastjet’s stabilisation plan aims to rapidly cut costs and sustainably increase revenue.
On AIM, Fastjet shares gained 2.2% to trade at 17p on Thursday morning.