Low-cost African airline Fastjet proposed the disposal of its Zimbabwean operations to investors on Wednesday as the group now expects further funding will be required by the end of February 2020 if its wants to continue operating in its current form.
Fastjet said it was currently in active discussions with certain major shareholders to explore various options including raising equity capital and a restructuring of the company involving the disposal of Fastjet Zimbabwe.
The group said the disposal would be made in receipt of a consideration of approximately $8.0m from a consortium that would be led and underwritten by Solenta Aviation.
The disposal would also relieve Fastjet of roughly $5.4m-worth of current liabilities and $3.2m of future aircraft capital expenditure.
Chief executive Mark Hurst said: “The disposal, if agreed, approved and implemented, would be expected to de-risk the significant uncertainty and cash drain that shareholders have historically suffered and allow the group to continue operating under a more stabilised and simpler business model.”
“This revised strategy allows the group the opportunity to create a single Fastjet brand throughout key markets in Africa, leverage its key intellectual property of its brand and airline management solutions and invest in viable, already-established airlines where it can.”
In terms of recent trading, Fastjet said revenues had grown 20.4% to $34.1m over the ten months ended 31 October despite revenues halving to $2.0m in Mozambique due to the ongoing supply and demand challenges in the nation.
Fastjet still expects to report a loss in 2019, albeit a significantly narrowed one of $7.0-8.0m.