Fastjet seeks to raise $75m to grow African routes
Low-cost African airline fastjet plans to conduct a placing to raise gross proceeds of at least $75-million through the issue of new ordinary shares at 0.1p a share, telling the market on Thursday that proceeds would be deployed as expansionary working capital and to acquire additional Airbus A319 aircraft.
“There is a working capital requirement to fund further expansion and the launch and growth of operations in Zambia, Zimbabwe, Kenya and South Africa… [and] build a sizeable operation in each country.
“Fastjet’s Tanzanian operation, which comprises a well-recognised brand name and both domestic and international routes, means that it is now well placed to further develop its existing Tanzanian operations [but] the current fleet of three aircraft is now almost fully utilised and growth opportunities will require increased numbers of aircraft over the remainder of the year. This will enable fixed overhead costs to be further spread over a larger operation,” it outlined in a statement.
The low-cost carrier had three domestic routes operating in its base country, Tanzania, linking Dar es Salaam with Mwanza, Kilimanjaro and Mbeya, and four international routes between Dar es Salaam and Johannesburg, Harare, Entebbe and Lusaka.
Building on the success of the Tanzanian operation, fastjet planned to roll out the model across the African continent and had identified five countries – Kenya, Uganda, Zambia, Zimbabwe and South Africa – as key markets for expansion of its business plan.
The airline outlined that the placing would principally be conducted by way of an accelerated book-building process and approval would be sought from shareholders to effect a share consolidation that would see every 100 existing ordinary shares of 1p each being consolidated into one new ordinary share of £1 apiece.
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