FastJet, the Africa-focused airline that warned this week that a severe funding crunch may cause it to halt trading, has disclosed plans to raise at least $10m in a share placement.
Under the plans announced on Friday, FastJet said it would launch an accelerated book build process — in which certain qualified investors are invited to take part in a new share issue. It is seeking proceeds of at least $7m through the placing at a price of 8 pence per share.
It said the pricing “represents a premium of 146 per cent to the closing price of 3.25 pence per ordinary share on 28 June 2018.”
Solenta Aviation Holdings, FastJet’s biggest shareholder, has agreed to subscribe to 28.9m shares at the placing price for gross proceeds of $3m.
Liberum Capital is acting at FastJet’s agent and sole bookrunner in the placing. Books are expected to close by 10am London time on Friday.
FastJet will also make an “open offer” to qualifying shareholders pending the passage of “certain resolutions” at the company’s annual general meeting, scheduled for Friday. It is looking to raise £1.6m (roughly $2.1m) through this process.
The news comes just days after FastJet warned investors that its cash balance fell to $3.3m as of June 8, down from $7.5m just weeks before, on May 24. It said that if it is unable to raise fresh funds, “the group is at risk of not being able to continue trading as a going concern.”
“Today’s capital raising will give fastjet the adequate headroom it needs for the remainder of 2018,” Nico Bezuidenhout, chief executive, said on Friday.
“Although there were some unexpected headwinds in 2017, the stabilisation plan put in place by the board has significantly reduced the cost base of the company and right-sized the business.”
