viewFastjet PLC

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

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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