FJET.L Share News (FJET)

(ShareCast News) - Fastjet, an African based low-cost airline, has entered into a binding sale agreement of its solely-owned Airbus A319 with Avtrade.The consideration is to be paid $8m in cash with a 10% deposit payable on signature of the agreement and the balance on delivery.Included in the agreement is also an option to continue to operate the aircraft from 3 October 2016 to 17 October 2016 wherein $200,000 is reduced from the proceeds for a usage of up to 100 cycles.The company plans to use the proceeds as working capital for the implementation of its stabilisation plan.The company is reducing the size of its fleet as well as transitioning the fleet from the existing A319 aircraft to smaller aircraft. The board expects the move to yield approximately a 15% cost reduction for fuel, maintenance, handling and navigation charges.Chief executive Nico Bezuidenhout said: "The sale of our Airbus A319 is an important step in our Stabilisation Plan and our move towards a more appropriate size of fleet. It's early days but the Plan is progressing well and the money raised from this sale will be used to drive its continued implementation."The share price rose 11.19% to 24.60p at the close on Monday.