Fastjet ends Darwin equity financing deal with £11mln fundraising

Low-cost African airline Fastjet (LON:FJET) has raised £11mln in a placing and subsequently ended its equity financing facility with Darwin Strategic.

The company issued 687.5mln new shares (around 112% of the existing share capital) at 1.6p, a slight discount to the market price (1.8p at yesterday’s close).

Directors, including chief executive Ed Winter and finance chief Angus Saunders, have accounted for around £1mln of the £11mln, while Sir Stelios Haji-Iannou’s easyGroup also invested £1mln in the placing.

EasyGroup has also agreed to cancel the management consultancy fee under the brand licence in exchange for the receipt of 94.3mln Fastjet shares worth around £1.5mln. It also means an end to the previously agreed cash payments equating to around £4.3mln over the next eight years.

The company also announced an open offer of 250mln shares to raise up to £4mln for qualifying shareholders on the same terms as the placing.

Fastjet has terminated its equity financing with Darwin, first announced in June last year. The company said the facility has served it well over the past year, but is no longer required to finance further growth.

In a brief trading update ahead of full-year figures expected to be released in June, Fastjet said it continues to trade in line with management’s expectations.

It expects revenues, including for Fly540, of around US$53mln and operating losses before tax of US$47mln.

Further impairments relating to the Fly540 legacy business during the remainder of the year are not expected to exceed US$25mln.

The group said the Fly540 restructuring was “very well advanced” and will be completed shortly.

Fastjet’s chief executive Ed Winter said: “I am pleased that this fund-raising has been completed so successfully. It is clear that the low cost airline model is now established in Tanzania, with customer acceptance developing rapidly.

“Customer feedback is extremely positive, and ancillary revenue streams continue to see steady improvement.”

Winter added: “We now look to move to the next phase of Fastjet’s expansion with further international routes, additional aircraft and more bases. Securing the funding for management to fulfil that plan is a great step forward.”

Sir Stelios Haji-Iannou of easyGroup said: “I am delighted that Ed Winter and his team at Fastjet managed to get such a successful backing from the City institutions, raising the necessary funds to get the company to the next level. I am happy to have also contributed myself in this effort.”