LONDON (Alliance News) - fastjet PLC said the resolution proposed by shareholder easyGroup Holdings Ltd to remove Executive Chairman Colin Child was defeated at fastjet's general meeting on Tuesday.
Shares in fastjet were trading down 16% at 23.98 pence on Tuesday.
easyGroup is owned by billionaire investor Stelios Haji-Ioannou and holds a 13% stake in fastjet. Haji-Ioannou had called for the removal of Child amid an ongoing spat between easyGroup and fastjet which has already seen the resignation of Chief Executive Ed Winter.
Winter resigned in March a week after the African low-cost airline issued a profit warning for 2016, which he blamed on "prolonged" challenges facing the African aviation industry leading to a dip in passenger numbers. Haji-Ioannou had sought to remove Winter prior to his resignation.
fastjet has been under increased scrutiny from Haji-Ioannou and easyGroup, who have raised concerns the airline will run out of money. The group laid the blame on Winter for fastjet's "ridiculous cost overheads", while also claiming the airline was in breach of its agreement with easyGroup for failing to publish passenger numbers.
In May, easyGroup called for the removal of Child as chairman, but at the general meeting held on Tuesday, the large majority of shareholders voted against his removal. Some 33 million votes were cast against his removal, while 9.6 million votes were cast for his removal.
Earlier on Tuesday, fastjet released a trading update in which it reported continued challenges in the trading environment in Africa, with lower-than-expected passenger numbers and a decline in load factor in the first half of 2016.
fastjet said that while the yield per passenger continues to improve from its low point last October, passenger numbers remain lower than expected. Domestic routes within Tanzania are showing signs of recovery, but international services remain difficult, fastjet said.
Some 390,000 passengers are forecast to have travelled with fastjet in the six months ending June 30, up from 363,726 in the first half of 2015, but load factor declined to 47% from 70%, which fastjet said reflects the increase in its available capacity over the past year.
fastjet added it has been working with soon-to-be Chief Executive Nico Bezuidenhout, who is joining the group on August 1 from Mango Airlines, in identifying a number of opportunities to stabilise the business and address many of the challenges it faces.
These include a fundamental review of the fleet, both the size and type of aircraft operated, the routes flown, the relocation of the head office to Africa, and revenue generation initiatives.
Bezuidenhout was appointed as CEO earlier this month after Winter stepped down.
fastjet also said it has commenced the initial phases of a fundraising exercise, which it plans to complete in July. This is in order to raise finance to provide "essential" working capital, as well as to effect the changes to operations, reduce costs further and pursue revenue generating initiatives to grow the business.
"The board believes that with a new CEO, who has a proven track record of successfully operating a low cost carrier in Africa, combined with a more pragmatic approach to operating the business, a much reduced cost base and management positioned in proximity to our markets and customers, the group has a viable and attractive future," Child said.
By Karolina Kaminska; karolinakaminska@alliancenews.com @KarolinaAllNews
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