Jan 5 Budget airline Fastjet Plc said
South African carrier Solenta would become a 28 percent
shareholder in the company and that it would also raise at least
$28.8 million through a share placement.
Africa-focused Fastjet said on Thursday it would buy a
special purpose vehicle (SPV) held within the Solenta group by
issuing nearly 95.6 million shares.
The SPV has three wet-leased aircraft and the supply of
other services over the next five years.
The share issue is priced at 16.3 pence each, representing a
nearly 2 percent discount to Fastjet's Wednesday close of 16.625
pence, the company said.
Fastjet said it would use the proceeds for working capital
purposes, allowing it to implement new revenue generating
measures and reach cash flow break-even by the fourth quarter of
The company said Solenta would have the right to nominate
two members to its board.
Fastjet is looking to cut costs amid tough conditions in its
home market, Tanzania. In March, it warned that it would no
longer be cash flow-positive this year.
In November, Fastjet's chairman resigned bowing to the
pressure from its second largest investor to sack him for
failing to relocate the airline's head office quickly and
criticised him for a high cost base.
(Reporting by Rahul B in Bengaluru; Editing by Amrutha