Image copyright Fastjet

Shares in African budget airline Fastjet collapsed on Wednesday after warning it could go bust unless it obtains new funding.

The airline, set up by easyJet founder Sir Stelios Haji-Ioannou, flies in several African countries including South Africa, Tanzania and Zimbabwe.

It is talking to major shareholders about an equity fundraising.

However, if no new funds emerge, Fastjet said it may not be "able to continue trading as a going concern".

"Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome," the company said.

Fastjet has just $3.3m in cash, of which $1.75m is held in Zimbabwe and is not readily accessible.

Shares fell 72% to 4.25p in afternoon trading in London, valuing the company at less than £20m.

If the talks fail, Fastjet said it could be suspended from trading on the AIM market.

Sir Stelios has been Fastjet's major shareholder but now has a stake of less than 3% in the company.

Two years ago he was involved in a boardroom dispute about leadership at the airline.</s>Shares in African budget airline Fastjet have collapsed by two thirds after warning it could go bust without new funding.

The airline, backed by easyJet founder Sir Stelios Haji-Ioannou, flies in several African countries including South Africa, Tanzania and Zimbabwe.

It is talking to major shareholders regarding potential equity fundraising.

However, if no new funds emerge, Fastjet said it may not be "able to continue trading as a going concern".

"Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome," the company said.

Shares fell 67% to 5p in morning trading in London, valuing the company at about £22,

If the talks fail, Fastjet said it could be suspended from trading on the AIM market.

Sir Stelios is Fastjet's major shareholder and had been involved in a boardroom dispute two years ago about leadership at the airline.</s>The low-cost African airline backed by Easyjet founder Sir Stelios Haji-Ioannou has warned this morning it could go bust unless emergency talks with shareholders yield new funding.

Fastjet, which offers flights across a number of African countries, said it is in "active discussions" with major shareholders regarding a potential fundraising.

Shares in the budget carrier slumped more than 60 per cent on the update.

Read more: Shares in Fastjet have plummeted after the chairman took off

In a statement, the company 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. Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome.

Fastjet expects that any equity fundraise will be tied up in conjunction with the announcement of the company's annual results for the year ended 31 December 2017.

The airline said it had a cash balance of $3.3m, of which $1.75m is restricted cash in Zimbabwe.

In April, Fastjet issued a trading update saying underlying trading for the year was broadly in line with expectations, though it noted exceptional cash costs of $4m incurred in December last year due to engine failure on an aircraft.

Then earlier this month, the airline said it was entering into a quieter period of trading, and on its projections, "headroom over available cash resources was minimal".

It said it had entered into unsecured loan agreements to make a chunk of the group's restricted cash held in Zimbabwe available.

Haji-Ioannou, Fastjet's major shareholder, had previously been embroiled in a boardroom tussle at the airline, saying he had lost faith in the management and board in early 2016.

Read more: Fastjet's shares drop as it plans to raise funds to turn around fortunes</s>Shares in African budget airline Fastjet have collapsed by two thirds after warning it could go bust without new funding.

The airline, backed by easyJet founder Sir Stelios Haji-Ioannou, flies in several African countries including South Africa, Tanzania and Zimbabwe.

It is talking to major shareholders regarding potential equity fundraising.

However, if no new funds emerge, Fastjet said it may not be "able to continue trading as a going concern".

"Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome," the company said.

Fastjet has just $3.3m in cash, of which $1.75m is held in Zimbabwe and is not readily accessible.

Shares fell 67% to 5p in morning trading in London, valuing the company at about £22m.

If the talks fail, Fastjet said it could be suspended from trading on the AIM market.

Sir Stelios is Fastjet's major shareholder and had been involved in a boardroom dispute two years ago about leadership at the airline.

Sir Stelios said he was "very disappointed" at the developments: "I have been increasingly concerned over the last few years at the way Fastjet was being run ... If Friday's AGM goes ahead I will ensure my representatives continue to voice my strong objections and vote against the tabled resolutions."</s>Shares in FastJet crumbled on Wednesday after the struggling budget airline warned that it is at risk of going bust unless it secures emergency funding.

Shares in FastJet crumbled on Wednesday after the struggling budget airline warned that it is at risk of going bust unless it secures emergency funding.

The loss-making airline, which offers budget flights across a number of African countries, said it is in “active discussions” with major shareholders regarding a potential equity fundraising.

However, in the same breath, it added that, in the absence of fresh cash, “the group is at risk of not being able to continue trading as a going concern”. Shares were down more than 76% in afternoon trade.

FastJet added: “Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome. “It is expected that any equity fundraise will be concluded in conjunction with the announcement of the company’s annual results for the year ended December 31 2017.”

The group said if the fundraising is not successful, it will result in FastJet being suspended from trading. FastJet warned that it has a cash balance of just 3.3 million US dollars, of which 1.75 million US dollars is restricted cash in Zimbabwe.

Over the past two years FastJet has been reducing costs as part of a stabilisation plan.</s>Struggling budget airline FastJet has warned that it is at risk of going bust unless emergency talks with shareholders result in fresh funding.

The loss-making airline, which offers budget flights across a number of African countries, said it is in "active discussions" with major shareholders regarding a potential equity fundraising.

However, in the same breath, it added that, in the absence of fresh cash, "the group is at risk of not being able to continue trading as a going concern".

FastJet added: "Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome.

"It is expected that any equity fundraise will be concluded in conjunction with the announcement of the company's annual results for the year ended 31 December 2017."

The group said if the fundraising is not successful, it will result in FastJet being suspended from trading.

FastJet warned that it has a cash balance of just 3.3 million US dollars, of which 1.75 million US dollars is restricted cash in Zimbabwe.

Over the past two years FastJet has been reducing costs as part of a stabilisation plan.</s>Fastjet, the African low-cost airline, is on the verge of going bust and has warned shareholders it will cease trading on Friday unless it can raise more cash urgently.

The airline, which started operating in 2012 with the backing of easyJet’s founder, Sir Stelios Haji-Ioannou, is in discussions with major shareholders to raise more funds but admitted it had no assurance of a positive outcome.

The London Stock Exchange-listed compnay said it “had continued to consume cash”, and from $7.5m (£5.7m) a month ago it now had just $3.3m in its cash reserves – more than half of which is locked up in Zimbabwe.

In a notice to investors, Fastjet said it was “at risk of not being able to continue trading as a going concern”.

Fastjet launched in Tanzania with an ambition to become a pan-African low-cost carrier, but it has struggled throughout with problems including the continent’s banking infrastructure, overambitious plane orders and office costs.

Its shares plummeted by another 70% on Wednesday on the news, to just £3.70 – less than 0.1% of their price five years ago – valuing the company at just over £19m.

Haji-Ioannou, who owned the Fastjet brand until last year, fell out with the company’s management in 2016 and demanded wholesale changes, including the removal of the chief executive, Ed Winter, and the relocation of its headquarters from the UK to Africa to cut costs.

He said: “Naturally I am very disappointed at this news. It had been my hope to see safe, low-cost air travel thrive in Africa as elsewhere. However, I have been increasingly concerned over the last few years at the way Fastjet was being run, first by Ed Winter and his team and now by Nico Bezuidenhout.

“This prompted me on several occasions to indicate my concerns about the company’s management and vote my shares accordingly. If Friday’s AGM goes ahead I will ensure my representatives continue to voice my strong objections and vote against the tabled resolutions.”

The airline has expanded into South Africa, Zimbabwe, Zambia and Mozambique. But it has never carried more than a million passengers a year, now operating just four small Embraer aircraft, having ditched Airbus A319s that they were failing to fill.

It lost an average of $50m a year up until 2016. Fastjet has yet to file its 2017 results, which have to be published by this Friday for it to remain listed on London’s AIM exchange.</s>African budget airline Fastjet has warned that it could go bust unless it secures new funding, knocking more than two-thirds off the value of its shares in a matter of hours.

The company said that as of June 18, it had a cash balance of $3.3m (£2.5m) and was talking to its major shareholders regarding a potential equity fundraising.

“Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome,” it warned on Wednesday.

If no new funds emerge, Fastjet said it might not be “able to continue trading as a going concern” and could be suspended from trading on London’s Aim market.</s>A budget airline founded by Sir Stelios Haji-Ioannou is set to go bust unless investors bail it out.

Shares in Fastjet, which has been dubbed the Easyjet of Africa, plunged 70 per cent as it revealed urgent talks with shareholders.

The firm warned it could be forced to stop trading on London’s junior stock exchange if a deal wasn’t reached.

The company sounded the alarm after admitting it had burned through more than half its remaining cash in a month.

Fastjet was launched with fanfare as the Easyjet equivalent for Africa, offering budget fares to fly between the region’s different nations.

However, it has been beset with problems with investors warning over high costs and management based in the UK.

On May 24 Fastjet said it had about £5.7m but by June 18 this had fallen to just £2.5m. About £1.3m of the remaining sum is tied up in Zimbabwe.

In a gloomy statement yesterday, the firm begged shareholders for more money.

It said: ‘The company is currently in active discussions with its major shareholders regarding a potential equity fundraising.

‘Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome.’

Haji-Ioannou, who was a top Fastjet shareholder but now owns just 1.6pc, said he was disappointed it was embroiled in fresh turmoil.

The billionaire led shareholder revolts in 2016 that ousted former chief executive Ed Winter and chairman Colin Child, after the company reported a £25m loss. Under boss Nico Bezuidenhout, the firm has been trying to turn around its finances and make efficiency savings. But yesterday Haji-Ioannou said: ‘I have been increasingly concerned over the last few years at the way Fastjet was being run – first by Ed Winter and his team and now by Nico Bezuidenhout.

‘This prompted me on several occasions to indicate my concerns about the company’s management and vote my shares accordingly.’

The latest crisis comes after years of turbulence at the South African airline, which was set up in 2012. It serves countries including Tanzania, Zimbabwe and Mozambique.

When it first launched commercial flights, Fastjet’s shares were worth around 2800p, but since then they have fallen by more than 99 per cent. Fastjet previously went to investors for cash in 2016 and 2017 and announced it had taken out a loan of £1.5m earlier this month.

For the 12 months to September 29 it reported a loss of £13.2m, narrowing from £31.4m the previous year.

Shareholders will vote on its latest fundraising plans at the company’s annual general meeting on Friday. Yesterday Fastjet shares fell 76.1 per cent, or 11.8p, to 3.7p.
Shares in African international airline Fastjet fall by 72% amid equity talks amongst shareholders, with the airline warning that trading may be suspended entirely and the company liquidated if a solution is not found.