LONDON (Alliance News) - Fastjet PLC on Monday announced changes to its loan agreements with Annunaki Investments Pvt Ltd and SSCG Africa Holdings following the introduction of a new local currency in Zimbabwe.
Shares in of African airline Fastjet were down 9.1% at 1.50 pence in afternoon trade.
Back in June 2019, in order to make a portion Fastjet's restricted cash held in Zimbabwe available, FastJet leant USD7 million of cash from Fastjet Zimbabwe to Annunaki in exchange for a USD2 million loan to Fastjet from SSCG. These loans were extended in March and are now repayable in June.
In February 2019, the Reserve Bank of Zimbabwe declared its intention to introduce a new local currency, RTGS, which devalued its domestic US dollar cash balances, which had previously has a one-to-one exchange rate with the US dollar.
The new currency also coincided with the launch of a new domestic currency, ZWL dollars, made up of bond notes and RTGS. The USD7 million loan to Annunaki was then valued at ZWL7 million, around USD1.4 million based on interbank rates on May 31.
USD1.3 million will be repaid to SSCG by June 30 and Annunaki will refund ZWL7.0 million to Fastjet Zimbabwe. USD750,000 of the unsecured loans will be extended to January 31 2020.
The loan amount from fastjet Zimbabwe to Annunaki is has been fully repaid. During the term of the loan agreement with SSGC, SSGC has the option to convert the USD750,000 into ordinary shares in Fastjet.
