Struggling Fastjet plans to raise at least $40 million

Low-cost African airline Fastjet, which said in September it needed more cash within a month to continue operating, announced a fundraising and equity refinancing aimed at increasing its equity base by at least $40m. Fastjet, whose shares lost more than half their value after September’s announcement, said the steps would significantly reduce its debt and provide the company with working capital until the end of 2019. The airline, which operates in Tanzania, Zambia, Zimbabwe, Mozambique and South Africa, announced soon afterwards that it had raised $11.5m through a placing of 898.4m shares. “Business in our continuing operations in Zimbabwe and growth-markets of South Africa and Mozambique is on the right track”, CEO Nico Bezuidenhout said. In addition to the placing, Fastjet’s largest shareholder Solenta Aviation agreed to subscribe 316.7m shares of Fastjet, raising $4.1m and increasing Solenta’s stake in the company to 54.3% from 29.8%. Fastjet will also issue 1.91b shares valued at $24.4m to acquire four Embraer 145 aircraft from Solenta and to settle the majority of Solenta long-term loans to the company. In addition, Fastjet also proposed an open offer to raise up to $5.3m.<br/>