By PHILIP MWAKIO
Fastjet, African budget carrier has announced plans to raise $18.4 million (Sh1.58 billion) through the issue of 687.5 million new shares by April 15, as it struggles to gain momentum and stem losses from its legacy Fly540 legacy regional operations.
This is according to latest information contained in Air Transport World (ATW) an online website for aviation industry. As part of Fastjet’s latest funding drive, easyGroup has agreed to waive its consultancy fees in return for £1.51 million (Sh218.95 million) in new shares, while easyGroup IP Licensing will invest a further £1 million (Sh145 million) in cash.
Fastjet operates on a brand licence from Stelios Haji-Iannou’s easyGroup. Fastjet values the waiver at about £4.3 million (Sh623.5 million) over the next eight years.
Conditional on Fastjet hitting its £10 million (Sh1.45 billion) placement target, easyGroup IP Licensing has also agreed to invest £1 million (Sh145 million) in cash.
Existing shareholders will be offered 250,000,000 shares, which should raise up to £4 million (Sh580 million). Around £3 million (Sh435 million) of the fresh funding will be used for “central services infrastructure,” according to a stock market declaration.
A further £2 million (Sh290 million) will be invested in new base costs, £3 million (Sh435 million) will be ploughed into its Tanzanian operation as working capital, and the remainder will be used for general funding. This means Fastjet will terminate its former funding facility, provided by Darwin Strategic, saying it is no longer required.
