(Adds result of placement)
Jan 5 Budget airline Fastjet Plc said
South African carrier Solenta would become a 28 percent
shareholder in the company and that it had raised $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 was priced at 16.3 pence each, representing
a nearly 2 percent discount to Fastjet's Wednesday close of
16.625 pence, the company said.
The company said it had placed 143.4 million shares, raising
proceeds in line with its target.
Fastjet also added that its Chief Executive Nico
Bezuidenhout had subscribed to 124,522 shares, taking a 0.04
percent stake in the company.
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.
Shares in Fastjet were up 3.7 percent at 17 pence by 1222
GMT, clocking trading volumes that were 5.8 times its 30-day
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