LONDON (Alliance News) - Low-cost airline Fastjet PLC on Friday said two of the terms of its unsecured loans have now been changed, and the loans have also been extended to the end of March.
Shares in Fastjet were down 5.3% at 1.35 pence on Friday.
In June 2018, Fastjet entered into loan agreements with Annunaki Investments Pvt Ltd and SSCG Africa Holdings in order to free up some of its restricted cash held in Zimbabwe.
To achieve this, Fastjet lent USD5 million in local currency from Fastjet Zimbabwe Ltd to Annunaki and received in return a USD2 million loan from SSCG. This USD2 million was to be used for working capital purposes.
These unsecured loans were repayable in December 2018 but this now has been extended to March 31.
However, the loan amount from Fastjet Zimbabwe is now USD7 million rather than USD5 million due to devaluation of the loan's underlying currency.
On top of this, SSCG has been given the option to convert the USD2 million repayment, plus interest, into Fastjet shares.
Fastjet had a troubled 2018.
In late September, the airline reported a widened interim loss relating to Fastjet Mozambique and said it needed additional capital by the end of October to keep operating. Fastjet did not obtain funding until mid-November but managed to hold on nonetheless.
By December 13, the company's cash balances stood at USD7 million, with USD6.5 million of this being restricted cash held in Zimbabwe. Fastjet's chief financial officer will depart at the end of March with no successor yet named.