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fastjet says it needs fresh funding to keep flying as shares plummet

On top of its funding woes, the African carrier reported a widening operating loss and said it may exit the Tanzanian market
fastjet says it needs fresh funding to keep flying as shares plummet
The airline said it is in talks with investors over a new injection of cash

fastjet PLC (LON:FJET) said it needs to secure additional funding by the end of October to enable the African budget airline to continue operating, sending its shares down more than 40%.

The low-cost African carrier, which is majority-owned by easyJet PLC (LON:EZJ) founder Sir Stelios Haji-Ioannou, on Wednesday said its cash resources were low and that it was in talks with its largest investors over a potential fundraising.

READ: fastjet shares weak after cautious trading update; Liberum Capital cuts price target

“Additional funding will be required by the end of October to enable fastjet to continue operating … the company is currently in active discussions with its major shareholders regarding a potential equity fundraising, in the absence of which the group is not able to continue trading as a going concern,” fastjet said in its first-half results statement.

The airline added that while initial talks with certain shareholders had been positive, discussions were ongoing and there can be no guarantee of a successful outcome.

The African carrier on Wednesday said its operating loss in the six months to the end of June 2018 had widened to US$14.6mln from US$13.2mln a year ago. However, its revenue jumped almost 50% to US$30.1mln.

Fastjet said that it was encouraged by trading in the Zimbabwean and Mozambique markets but that it could leave the Tanzanian market due to the impact of continued losses and a highly competitive landscape in the country.

Shares in fastjet were 44.36% down at 3.70p in mid-afternoon trade.

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Fastjet PLC Timeline

October 29 2015
September 29 2015

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