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Bloomberg
Fastjet Plc dropped 48 percent in London trading after saying it needs to raise further funds to survive as it runs short of cash and losses mount.
A cash balance that stood at $7.5 million on May 24 had shrunk to $3.3 million as of June 18 following spending on aircraft, and Fastjet is struggling to access some loan commitments, it said.
“The company is currently in active discussions with its major shareholders regarding a potential equity fundraising, in the absence of which the group is at risk of not being able to continue trading as a going concern,†said the carrier, which is based in Johannesburg, listed in London and does most of its flying in East Africa.
While talks with some investors have been positive, discussions are ongoing, Fastjet said, adding that any equity injection will be concluded by the time it announces earnings
figures for 2017, something that’s scheduled to happen by the time of an annual shareholder meeting.
If the fundraising is not successful that will result in the annual results not being published and the company being suspended from trading on London’s Alternative Investment Market, it said.
FastJet was founded six years ago with the ambition of becoming the first discount airline spanning sub-Saharan Africa. The carrier has struggled to make a profit and under CEO Nico Bezuidenhout, it has offloaded a fleet of Airbus SE A319s and switched to smaller regional jets better matched to demand.