FJET.L Regulatory News (FJET)

10 April 2014

fastjet plc

("fastjet" or the "Company")

Placing, Open Offer, EFF, Trading & Brand Licence

Fastjet Plc. (AIM:FJET) is pleased to announce a placing with institutional and other investors to raise gross proceeds of £11 million, an amendment to the terms of the Company's brand licence with easyGroup Holdings Ltd. ("easyGroup"), an open offer to shareholders of up to £4 million, an update on current trading, and the termination of the Company's Equity Finance Facility ('EFF') with Darwin Strategic Limited.

Placing

The placing involves the issue of 687,500,000 new Ordinary Shares (the "Placing Shares"), amounting to approximately 112% of the existing issued share capital of the Company, at a price of 1.6 pence (the "Issue Price") to raise gross proceeds of £11 million. The Issue Price represents a discount of 11.1 per cent. to the closing middle market price of 1.8 pence per Ordinary Shares on 9 April 2014.

Directors & Senior Management Participation

Certain Directors, specifically Mr. Edward Winter and Mr. Angus Saunders, and senior managers of the Company have subscribed in the Placing for Placing Shares with an aggregate value of approximately £1 million, which constitutes both dealing by individuals concerned and in so far as these Directors are concerned a related party transaction for the purposes of the AIM Rules, further details of which are set out in the section headed 'Directors Dealing & Related Party Transaction' below.

easyGroup

The Company has a Brand Licence agreement with easyGroup for the use of the fastjet brand in return for a royalty payment. easyGroup IP Licensing Limited has agreed to invest £1 million in the Placing. On the closing of the Placing easyGroup has also agreed with the Company to terminate the management consultancy fee under the Brand Licence in exchange for the receipt of 94,287,227 Ordinary Shares in the Company (the "easyGroup Shares") with a value of approximately £1.51 million at the Issue Price, resulting in the cessation of previously agreed cash payments equating to approximately £4.3 million over the next eight years.

Termination of Darwin EFF

The Company announces that is has terminated the Equity Financing Facility ('EFF') with Darwin Strategic Ltd. which was originally announced on 13th June 2013 and further extended on 12th March 2014. This facility has served the Company well over the past year, providing capital to allow the Company to successfully reach its current position from where it can now expand, but is no longer required to finance further growth.

Current Trading and Prospects

The Company expects to publish its financial statements for the year ended 31 December 2013 in June. The Company had continued to trade in line with management expectations since 30 June 2013. The Company expects, for the full group including the Fly540 operations,revenue for the year ended 31 December 2013 to be approximately $53 million and the operating loss before tax and exceptional items is expected to be approximately $47 million. Further impairments in relation to the Fly 540 businesses during the remainder of the year are not expected to exceed $25 million. The restructuring of the Fly540 operations is very well advanced and will be completed shortly. During 2013 less than $650,000 of fastjet Plc cash was utilised in the legacy Fly540 operations. The proceeds of the fundraising will provide the Company with the necessary capital to expand its low cost airline operation in Africa as outlined in Background to the Fundraising

Open Offer

In order to provide Shareholders an opportunity to participate in an issue of new Ordinary Shares on equivalent terms to the Placing an open offer at the Issue Price of up to 250,000,000 shares raising up to £4 million is intended to be made to qualifying shareholders. A circular to shareholders setting out full details of the Open Offer and the actions to be taken by shareholders in respect of the Open Offer is expected to be published on or around 16 April 2014. The Open Offer is not being underwritten and is not conditional on the Placing.

The open offer Circular will be published on the Company's website, www.fastjet.com, and posted to shareholders in due course and a further announcement made at that time.

Ed Winter, CEO and Interim Chairman of fastjet said:

"I am pleased that this fund-raising has been completed so successfully. It is clear that the low cost airline model is now established in Tanzania, with customer acceptance developing rapidly. Customer feedback is extremely positive, and ancillary revenue streams continue to see steady improvement.

We now look to move to the next phase of fastjet's expansion with further international routes, additional aircraft and more bases. Securing the funding for management to fulfil that plan is a great step forward.

We appreciate the support of Sir Stelios Haji-Iannou and easyGroup, demonstrated both in their subscription to the Placing and their agreement to terminate the Management Fee in return for shares. I welcome the fact that the fastjet management team has shown its confidence in the business by joining me in making a very substantial personal cash investment in our company. The Darwin Strategic EFF that we have used for much of our funding to date, vital in bringing us to this point, has been a great partnership.

In response to many comments from shareholders over past months, I am also pleased that we have been able to offer all shareholders the opportunity of participating in this fund-raising on the same terms as the institutional placing.

I now look forward to leading the Company through the next phase of its development, to become the leading pan-African low-cost airline."

Sir Stelios Haji-Iannou of easyGroup said:

"I am delighted that Ed Winter and his team at fastjet managed to get such a successful backing from the City institutions, raising the necessary funds to get the company to the next level. I am happy to have also contributed myself in this effort. I looking forward to seeing the company offer even more people in Africa the same low fares that we all take for granted now in Europe."

For further information, please contact :

fastjet Plc Tel: +44 (0) 20 3651 6355

Ed Winter

Angus Saunders

W.H. Ireland Ltd. Tel: +44 (0) 20 7220 1666

James Joyce

Nick Field

Citigate Dewe Rogerson Tel: +44 (0) 20 7638 9571

Chris Barrie

Georgia Colkin

Background to the Fundraising

fastjet plc is the holding company of the low cost airline fastjet which commenced flights under the fastjet brand in Tanzania in November 2012 using a fleet of three Airbus A319 aircraft. By adhering to international standards of safety, quality, security and reliability; fastjet has brought a new flying experience to the African market at low prices. fastjet's long-term strategy is to become the first low-cost, pan-African airline. fastjet plc is also the holding company of Fly540, which operates in Kenya, Ghana and Angola.

The fastjet low cost airline was launched in Tanzania on 29 November 2012. fastjet operations in Tanzania carried a total of 31,500 passengers in February 2014 and achieved a load factor of 76 per cent. The average yield per passenger was $82, compared to $47 in February 2013.

fastjet currently has three domestic routes operating in Tanzania linking Dar es Salaam with Mwanza, Kilimanjaro and Mbeya and two international routes to Johannesburg and Lusaka. During 2013, management successfully secured fastjet's first international route rights and fastjet's first international route, Dar es Salaam to Johannesburg, commenced operations on 18 October 2013 and its second international route from Dar es Salaam to Lusaka, Zambia commenced flights in February 2014. Services between Lusaka's Kenneth Kaunda International Airport and Dar es Salaam's Julius Nyerere International Airport operate twice a week with a third flight scheduled from 15 April 2014. fastjet expects to increase the frequency of flights on this route in line with consumer demand, as more people make use of its safe, affordable and on-time service.

38 per cent of fastjet's passengers surveyed six months after the commencement of the fastjet operation were first time fliers and in that period 34,000 seats were sold to those booking early at the base-price of only USD$20, so establishing the low cost model in Tanzania. In June 2013 over 1,200 seats were sold for USD$20 each and, importantly, over 300 seats were sold for USD$200 each or higher. It is clear that the low-cost airline model works in Tanzania and is effective in stimulating and growing the market with customer acceptance of the model developing rapidly. The booking window (days between booking and flight) has increased significantly with customers quickly adopting the "book early for cheapest seats" model. Due to the chronic unreliability of air services prior to the arrival of fastjet, the majority of passengers previously booked tickets on the intended day of travel once they were assured that the flight would take place.

Feedback on customer satisfaction during the period has been extremely positive, with 98 per cent of fastjet customers surveyed saying that they would fly with fastjet again and 100 per cent saying that they would recommend fastjet to friends and business colleagues.

In order to offset lower rates of commercial activity on the Internet and low credit card usage in Africa, management continues to develop cutting-edge customer communication and facilitation tools. These include extensive use of social media such as Facebook and Twitter. Mobile phone penetration throughout Africa is very high and the fastjet website is optimised for use on smart phones. fastjet customers increasingly use mobile phone payment methods such as M-Pesa and Tigo to pay for seats. In December 2013, 19 per cent of ticket revenue was paid through mobile money.

Ancillary revenue streams, predominantly from baggage and flight change fees, continue to see steady improvement, increasing from USD$2.75 per passenger in January 2013 to USD$6.95 per passenger in December 2013. Additional services such as in-flight retail, allocated seating, hotel and travel insurance services will be introduced with the objective that ancillary revenue will continue to rise, both in absolute terms and as a percentage of total revenue.

fastjet's Tanzanian operation, which comprises a well-recognised brand name and both domestic and international routes, means that it is now well placed to further develop its existing Tanzanian operations. Management plans a controlled expansion, with all three aircraft fully optimised within the schedule by Q3 2014 with further international routes including routes to Kenya introduced by Q3 2014. This will enable fixed overhead costs to be spread over a larger operation, a key factor in turning the fastjet operation profitable. fastjet plans to add additional aircraft in 2015. It also plans to establish bases in Zambia, Kenya and South Africa. The Group is targeting to have 4 fastjet operational bases across Africa by 2016 and by 2018 to operate 24 aircraft, carrying approximately 6 million passengers per year with targeted revenues in excess of $500m.

Future Initiatives

Based on the Company's experience in Tanzania and Zambia it has confidence it can fulfil the strategy of becoming the pan African Low Cost Airline of choice. The low cost model has stimulated the Tanzanian market in the same way other such markets in other areas of the world were stimulated by its introduction. The Tanzanian consumer has embraced the brand and model with incredible speed and enthusiasm. Lessons learned whilst establishing the current operations will be deployed to our advantage during our expansion into other markets.

In some countries, developing the fastjet brand will involve direct investment (as is the case in Tanzania), while in other countries it is may be via a licencing agreement. Direct investment is most likely in larger, more mature markets, such as South Africa, Zambia and Kenya, with licencing agreements more likely in smaller, less well-developed markets and those with a difficult investment environment such as Nigeria. fastjet plans to undertake direct investment in a planned and orderly way, such that a material portion of the required investment can be internally funded.

fastjet Airline Management Services

For countries where fastjet considers a licencing agreement to be the appropriate route to establishing the brand, we have developed an Airline Management Services (AMS) concept. AMS facilitates the delivery of core elements of the fastjet service, such as, safety, brand, revenue management and sales and distribution channels, while other investors provide the capital required to fund the aircraft and start-up costs. In addition, fastjet AMS would offer other optional commercial, operational and management services. Discussions are on-going in a number of African countries, including Nigeria, with a view to launching airlines in this way under the fastjet brand.

Zambia

fastjet plc is in discussions with the Zambian government with the intention of creating a fastjet operation based in Lusaka. The Board see the business and political environment in Zambia as very progressive and fastjet's discussions to date with the Zambian government, Tourist Board and other stakeholders have been very positive. The Company believes the establishment of a fastjet operation would bring benefits to the country and Zambian people through the expansion of trade and tourism, as well as bringing safety and reliability improvements to the Zambian aviation industry. The new operation, whilst being distributed and marketed as a part of the pan-African fastjet network, would be a Zambian registered company in which fastjet plc will have a substantial stake. fastjet flights linking Lusaka with Dar es Salaam have proved an instant success with customers previously enduring 28 hour torturous road journeys.

Ancillary Revenues

On 28 February 2014 the Company signed two agreements with partners in the travel industry, marking the launch of partner ancillary products on fastjet.com. The first, with Rentalcars.com parent company, TravelJigsaw Ltd, will offer low-cost car hire in Africa through fastjet.com, and the second will deliver competitively priced online parking services in South Africa in partnership with Looking4Parking.com (L4P). fastjet expect to announce further ancillary revenue opportunities in the near future.

Principal terms of the Placing

The Company has conditionally raised £11 million before expenses by the conditional Placing of 687,500,000 new Ordinary Shares at the Issue Price to the Placees.

The Placing is conditional, inter alia, upon:

(i) the Placing and Open Offer Agreement becoming or being declared unconditional in all respects and not having been terminated in accordance with its terms prior to Admission; and

(iii) Admission becoming effective by no later than 8.00 a.m. on 15 April 2014 or such later time and/or date (being no later than 8.00 a.m. on 30 April 2014) as WH Ireland and the Company may agree.

If any of the conditions are not satisfied or waived (where capable of waiver), the Placing Shares will not be issued and all monies received from the Placees will be returned to them (at the Placees' risk and without interest) as soon as possible thereafter.

The Placing Shares will be issued free of all liens, charges and encumbrances and will, when issued and fully paid, rank pari passu in all respects with the existing Ordinary Shares, including the right to receive all dividends and other distributions declared, made or paid after the date of their issue.

Application will be made to the London Stock Exchange for the admission of the New Ordinary Shares to trading on AIM. It is expected that Admission will occur and that dealings will commence at 8.00 a.m. on 15 April 2014, at which time it is also expected that the New Ordinary Shares will be enabled for settlement in CREST.

Use of Proceeds

The Placing has raised gross proceeds of £11 million. The Directors intend that the net proceeds of the placing will be used:

· as to approximately £3 million for Central services infrastructure;

· as to approximately £2 million for new base costs;

· as to approximately £3 million Tanzania working capital; and

· as to the balance for general working capital.

Directors Dealing & Related party transaction

Following their participation in the Placing, the Company has been informed that on 10 April 2014, Mr. Edward Winter and Mr. Angus Saunders, both Directors of the Company, subscribed for 31,250,000 and 6,250,000 Ordinary Shares respectively at a price of 1.6 pence per Ordinary Shares, and as a result their interests in the Enlarged Share Capital are 31,300,000 and 6,250,000 Ordinary Shares, representing 2.2% and 0.5% respectively of the Enlarged Share Capital.

The participation in the Placing of Mr. Edward Winter, and Mr. Angus Saunders, both Directors of the Company is a related party transaction under the AIM Rules (the "Related Party Transaction").

The Independent Director, Mr. Robert Burnham, having consulted with the Company's nominated adviser, WH Ireland Limited, believe that the terms of the Related Party Transaction to be fair and reasonable insofar as Shareholders are concerned.

Intended Open Offer

In addition to the Placing, it is intended that a total of up to 250,000,000 new Ordinary Shares at the same price of 1.6 pence per share as the Placing shares will be made available to qualifying Shareholders pursuant to an Open Offer to raise up to £4 million before expenses.

Not all Shareholders would be qualifying Shareholders. In particular, Shareholders who are located in, or are citizens of, or have a registered office in restricted jurisdictions and certain other overseas jurisdictions would not qualify to participate in the Open Offer. Details of the definitive terms of the Open Offer, including the offer timetable and record date, will be set out in the Circular when it is published.

Additional information, action to be taken, overseas shareholders, settlement & CREST

Further details of the Open Offer, including action to be taken, information for Overseas Shareholders, settlement and CREST information, will be set out in the Circular which will be published in due course.

Total Voting Rights

Following Admission of the New Ordinary Shares, the Company's enlarged issued share capital will comprise 1,396,374,705 Ordinary Shares with voting rights. The Company holds 197 Ordinary Shares in Treasury and, the figure of 1,396,374,508 Ordinary Shares may therefore be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the FCA's Disclosure and Transparency Rules.

Definitions

The following definitions apply throughout this announcement, unless the context requires otherwise:

- ENDS -