LONDON (Alliance News) - Fastjet PLC Wednesday said it has raised GBP50 million through the placing of 5 billion shares to use for working capital to expand the business and for the acquisition of aircraft.
Clive Carver, a previous non-executive director at the airline, has also been appointed as the company's interim non-executive chairman with immediate effect.
Fastjet issued shares at a placing price of 1.0 pence per share. At the same time it will consolidate 100 existing shares into one share worth GBP1.
Fastjet were trading down 10.6% at 1.05 pence Wednesday afternoon.
The placing was conducted by way of an accelerated book-build led by Liberum as global co-ordinator and Liberum and WH Ireland Ltd as joint bookrunners.
The net proceeds of the fundraising will be deployed in two key areas; expansion working capital and the acquisition of aircraft.
There is a working capital requirement to fund further expansion and the launch and growth of operations in Zambia, Zimbabwe, Kenya and South Africa, the low-cost airline backed by easyJet PLC founder Stelios Haji-Ioannou said. This will be sufficient to build a sizeable operation in each country, and Fastjet will use funds raised in excess of that needed for its working capital requirements to commence an acquisition programme of used Airbus A319 aircraft.
Fastjet also said that trading in the 2014 year was "broadly in line with market expectations".
"I am delighted with the success of our placing and with the positive reaction of investors. While our low cost airline model is already well established and highly regarded in Tanzania, this fundraising is a transformative step towards achieving fastjet's goal of building Africa's most successful pan-continental low-cost airline," said Chief Executive Ed Winter in a statement.
By Joshua Warner; joshuawarner@alliancenews.com; @JoshAlliance
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