LONDON (Alliance News) - African low-cost carrier FastJet PLC on Thursday tabled plans to raise at least USD48.0 million via a placing and an equity injection by Solenta Aviation Holdings Ltd which will make the latter a major shareholder in the AIM-listed firm.
FastJet said African aviation group Solenta has agreed to provide and operate three wet-leased aircraft to FastJet, in addition to other services over the next five years. Johannesburg-based Solenta currently operates 49 aircraft under five of its own African carrier brands and has strategic alliances in a further seven African countries, FastJet said.
In consideration for the agreement, FastJet will issue 95.6 million shares to Solenta, giving the African company a stake of around 28% in the UK-listed firm. Solenta will have the right to appoint two directors to FastJet's board under the deal.
In addition, FastJet intends to raise no less than USD28.8 million via an accelerated bookbuild, with shares to be issued at 16.30 pence, a 2.0% discount to its closing price on Wednesday. FastJet said the fundraising has the support of its major institutional shareholders.
Shares in the company were down 0.5% to 16.55p on Thursday morning.
FastJet said the agreement with Solenta will give it the necessary infrastructure and capital to implement the final stages of its restructuring plan and to reach a cash flow break even level by the fourth quarter of 2017.
It will further improve the cash flow profile of FastJet moving forward, the firm said, and will allow it to leverage Solenta's existing business in Africa.
"Our agreement with Solenta represents a good operational and strategic fit. It provides FastJet with access to fleet and related services which, together with the funds raised through our proposed placing, will allow us to successfully implement the final stages of our stabilisation plan," said Nico Bezuidenhout, FastJet's chief executive and interim chairman.
"We have made good progress with the plan and the near-term priority continues to be to fully stabilise the business and to reach cash flow break even by the fourth quarter of this year," he added.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
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