African airline Fastjet reveals urgent need for more cash

Fastjet’s shares shed more than half of their value on Wednesday after the African budget airline said it needed more cash within a month for it to continue operating. Fastjet, launched in 2012 and modelled on the likes of no-frills airlines easyJet and Ryanair, has been running short of cash for more than two years and it was unclear if investors will continue to back it. “The company is currently in active discussions with its major shareholders regarding a potential equity fundraising, in the absence of which the group is not able to continue trading as a going concern,” the airline said. Fastjet’s shareholders include activist M&G Investment, Janus Henderson and South African carrier Solenta. Fastjet added that talks with some shareholders had been positive and discussions were ongoing, though it did not guarantee success. The budget airline has offered shares for cash at least twice in the last three months to meet its cash requirements, including last year to expand in South Africa and Mozambique. Fastjet’s shares, which have fallen over 16% this year, were down nearly 38% at 1231 GMT. The airline also posted a bigger half-year operating loss of $14.6m Wednesday, from a loss of $13.2m last year. The company said it was evaluating its Tanzanian operations and could cease operations in the country. <br/>