18th Mar 2016 15:59
LONDON (Alliance News) - fastjet PLC on Friday said it is taking legal advice for a letter which shareholder easyGroup Holdings Ltd immediately made public when sending it to the African low-cost airline on Thursday.
Shares in fastjet were trading down 16% at 27% at 30.49 pence Friday afternoon, having dropped to 23.50p earlier in the day.
The letter related to the contractual relationship between the pair, and fastjet said while it "welcomes constructive engagement" with all shareholders, it "cannot understand" why easyGroup published the letter without first raising its concerns with fastjet.
easyGroup, owned by billionaire investor Stelios Haji-Ioannou, holds a 13% stake in fastjet.
According to a report by This is Money published on Thursday, Haji-Ioannou's letter was seen by the Daily Mail, which reported that the businessman demanded fastjet immediately publish passenger numbers after he claimed that planes were only 10% full.
He also apparently wants detailed month by month cash flow forecasts citing concerns the airline may become insolvent in the next few months.
According to the report, Haji-Ioannou said he was concerned a move by fastjet to stop publishing passenger numbers four months ago could be in breach of its licensing agreement with easyGroup.
http://www.thisismoney.co.uk/money/markets/article-3497665/Stelios-demands-detailed-figures-Fastjet-amid-fears-Africa-focused-airline-brink-going-bust.html
"The board considers the publication of this letter as wholly inappropriate and is taking legal advice on the matter. The company holds easyGroup responsible for any damage caused to the business by the publication of this letter," fastjet said in a statement on Friday.
Later Friday, fastjet said it has "regrettably accepted" Tim Ingram's resignation, easyGroup's representative on the board of fastjet.
On Monday, fastjet revealed Chief Executive Ed Winter has resigned, after easyGroup proposed his removal from the board a couple of weeks earlier.
Winter's resignation came one week after fastjet issued a profit warning for 2016, following what it called "prolonged" challenges in the African aviation industry.
By Karolina Kaminska; [email protected] @KarolinaAllNews. Updated by Joshua Warner; [email protected]; @JoshAlliance
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