LONDON (Alliance News) - Low-cost African airline Fastjet PLC on Thursday said it will raise a total of GBP19.2 million via a placing and open offer, with the latter at a significant premium to its current share price.
Fastjet said it will raise GBP15.0 million via the placing, which will be run via an accelerated bookbuild by investment bank Liberum Capital Ltd. That will close later today. In addition it will raise GBP4.2 million via an open offer.
The shares will be issued at 50.00 pence per share, a significant premium to the company's closing price of 23.13p on Wednesday. Shares in Fastjet were up 43% to 33.00p after the news.
The funds will be used for working capital purposes and to back Fastjet's revised business plan, which includes the introduction of a new type of aircraft to its fleet and the relocation of its head office in the UK to Africa.
Fastjet said despite the ongoing cost reduction programme at the company, plus a recent reduction in routes and fleet size, the company continues to be cash flow negative. The funds raised will therefore provide essential working capital for Fastjet to pursue its strategy.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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