(Alliance News) - Fastjet PLC said that if it cannot find alternative funding by the end of August then it would not be able to continue trading as a going concern past that point.
Shares in Fastjet were down 13% at 0.14 pence in London in morning trading.
The budget African airline, which has its headquarters in Johannesburg, had been in talks with an investor consortium led and underwritten by Solenta Aviation Holdings Ltd, as well as local Zimbabwe investors. The talks concerned disposal of Fastjet's holding in Fastjet Zimbabwe.
However, as stated in May, talks with the consortium can only resume when "the impact and timeline of the lockdowns in South Africa and Zimbabwe" becomes known and so are currently on hold.
Based on Fastjet's current financial projects, as well as funds available and likely to be made available plus current creditor terms, only has enough resources to meet operational needs until the end of August.
Moreover, its headroom of cash resources is "minimal" and will be drawn down over the next few months so as to settle fixed costs and obligations in case lockdowns and South Africa and Zimbabwe are extended to September.
If flight operations fail to restart as sustainable levels in early September or it cannot access hard currency from Zimbabwe's Reserve Bank through repayment against legacy loans then it will stop being a going concern.
Fastjet said that given this, if not alternative solutions are found before August 31 it will be "unable to continue trading as a going concern" past that date.
As at Tuesday this week, Fastjet has cash reserves totalling USD1.0 million and no restricted cash.
In terms of trading, Fastjet has been performing some repatriation flights - around three per month - to Zimbabwe from South Africa while commercial flights are suspended until July 31 at the least.
It plans to return to routine commercial flight operations as soon as the South African and Zimbabwean governments allow.
Fastjet said its flying programme is remain flexible in the coming weeks and months "depending on how each respective government phases the release of its lockdown and, thereafter, on demand for seats."
By Anna Farley; annafarley@alliancenews.com
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