fastjet, the low-cost African airline, raised gross proceeds of approximately US$11.5 million as a result of placing 898,437,499 Placing Shares by Liberum, acting as sole bookrunner, at a price of one penny per share.

Also, the following Equity Refinancing arrangements were made:

· a subscription by Solenta, who has agreed to subscribe for 316,738,282 shares at the Issue Price for gross proceeds of US$4.1 million; and

· the issue of 1,909,824,218 shares at the Issue Price with a value of US$24.4 million a) to acquire four Embraer 145s from Solenta and to settle associated early termination lease charges, b) settlement of the majority of the Solenta long term loan and overdue interest, and c) professional fees.

The Issue Price represents a discount of 39% to the closing price of 1.65 pence per ordinary share on 16 November 2018.

The arrangements are subject to the approval by shareholders of the Authorizing Resolution at the General Meeting; the Solenta Subscription Letter becoming unconditional in all respects; and the Placing Agreement not having been terminated in accordance with its terms prior to Admission.

The Equity Refinancing will reduce fastjet's debt significantly and it is expected that it will result in the Group being fully funded through 2019.

The proceeds of the Equity Refinancing will comprise:

  • US$12.0 million of equity issued to Solenta for the acquisition of four Embraer 145s (and to settle associated early termination lease charges) to be deployed in Zimbabwe, as fastjet intends to localise assets;
  • US$10.4 million of equity issued to convert a significant portion of long term debt owed to Solenta (and accrued interest) (total principal debt owed to Solenta of US$12.0 million);
  • US$6.6 million of cash to settle all current short-term hard currency creditors;
  • up to US$3.7 million of cash to cover major creditor settlements associated with the decision to stop funding fastjet Tanzania;
  • US$2.8 million of cash to fund Mozambique losses, as operations remain in early stage development;
  • US$2.5 million of cash to settle hard currency creditors in Zimbabwe, providing contingency for currency repatriation;
  • US$2.0 million of equity to settle professional fees associated with the Equity Refinancing; and
  • up to US$5.3 million of cash for general working capital purposes across the Group depending on uptake of the Open Offer.

As a consequence of the Solenta Investment, Solenta's interest in Ordinary Shares will increase from 29.8% to 54.3%.

Trading for the four months ending October 2018, with the exception of fastjet Tanzania is broadly in line with management expectations:

  • continuing operations of Zimbabwe and Mozambique (launched November 2017) performance improvement is ongoing, with revenue from these two markets growing to $12.5 million and generating a trading loss of $1.3 million;

  • in South Africa, FedAir generated revenue of US$3.7 million, delivered trading profits of $0.35 million (for the three months ending September 2018) while providing a base from which the fastjet brand can gradually enter the market during 2019;

  • in Tanzania, which represents a discontinued business going forward, delivered $9.6 million in revenue and a trading loss of $4.7 million, consequent to Air Tanzania, the State-owned carrier in Tanzania, deploying wide-body (B787) capacity on Domestic Tanzanian routes at below cost yields, as well as regulatory delays experienced in deploying further aircraft in this market.

The Company also has entered into a conditional share sale agreement with local management in Tanzania in relation to the sale of the Company's interest in the holding company of fastjet Tanzania, fastjet Air TZ (BVI).

CEO of fastjet, Nico Bezuidenhout, stated, "Business in our continuing operations in Zimbabwe and growth-markets of South Africa and Mozambique is on the right track and revenues from these markets now cumulatively exceed that generated in Tanzania, a market in which fastjet has been active since 2012. The steps taken in acquiring the fastjet brand in 2017 allows fastjet to change the deployment model in Tanzania away from one where we assume equity risk and funding obligation, in its stead aiming to deploy the brand in Tanzania on a franchise basis. The third successive award as Africa's leading low cost carrier, received at the 2018 World Travel Awards, supports fastjet's brand building journey whilst the benefit of a restructured balance sheet going forward, should support sustainable growth".

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