10th Apr 2014 14:45
LONDON (Alliance News) - Low-cost African airline Fastjet PLC said Thursday that it is planning to raise about GBP15 million in a share placing and open offer, including an investment from billionaire Stelios Haji-Ioannou's easyGroup Holdings Ltd.
Fastjet said it will issue 687.5 million new shares at 1.6 pence each in the placing, roughly 112% of the existing issued share capital of the company, raising GBP11 million. It will also raise up to GBP4 million through an open offer of up to 250.0 million shares at the same price, allowing other shareholders to take part in the fundraising.
Shares in Fastjet were trading down 2.2% at 1.76 pence Thursday afternoon.
easyGroup IP Licensing Ltd has agreed to invest GBP1 million in the placing subject to a minimum total placing of GBP10 million. easyGroup Holdings has also agreed to receive shares worth GBP1.5 million in lieu of revenues of GBP4.3 million over the next eight years from a brand licence agreement.
The group also said that it has terminated its equity finance facility with Darwin Strategic Ltd, as it no longer needs the funds.
"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," the firm said.
Fastjet said that it had continued to trade in line with expectations, and expects to report revenue of around USD53 million for 2013. It expects to post an operating pretax loss of around USD47 million, including exceptional items.
Fastjet was founded when Rubicon Diversified Investments bought Fly540, which flies in Kenya, Ghana and Angola, from Lohnro in a reverse takeover in 2012. Haji-Ioannou got a stake as part of a deal that included licensing the FastJet name.
Since then FastJet has been shrinking and restructuring the Fly540 operations in an attempt to make them profitable, while focusing on growing its own-brand operations. Those own-brand operations are mainly within Tanzania, but the airline has recently launched some cross-border routes including to Johannesburg in South Africa and Lusaka in Zambia.
It expects further impairments in relation to its Fly 540 business to be no more than USD25 million for the year. The restructuring of the Fly540 operations is well advanced, Fastjet said, and will be completed shortly.
By Hana Stewart-Smith; [email protected]; @hanassallnews
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