News from London just in confirms that fastjet’s issue of additional shares was fully taken up and has helped to raise a further 50 million UK pounds or about US$75 million in new capital.
It was also confirmed that Ed Winter has stepped aside as interim Chairman to concentrate on his CEO role while Mr. Clive Carver has been installed as new interim Chairman in a non-executive role.
The additional funds will mostly be channeled towards the new airline set ups in Zambia and Zimbabwe but part at least will be used to help expand the route network to Uganda, as and when approved by the Kenya Civil Aviation Authority into Kenya.
Said Ed Winter when making the announcement this morning: “I am delighted with the success of our Placing and with the positive reaction of investors. While our low-cost airline model is already well established and highly regarded in Tanzania, this fundraising is a transformative step towards achieving fastjet’s goal of building Africa’s most successful pan-continental, low-cost airline. We will now be able to significantly expand our fleet and customer base, grow our operations organically, add new international routes, and expand the fastjet model in Kenya, South Africa, Uganda, Zambia, and Zimbabwe. In doing so, we look forward to bringing our safe, reliable, low-cost flights to up to 210 million potential customers, 20% of Africa’s population, and to creating a new market for aviation. We have also announced a proposed share consolidation which we expect to be a positive development for investors, reducing share price volatility. To allow me to fully focus on the growth of the business, I am pleased to say that Clive Carver has taken over as interim non-executive Chairman.”
In related news, it was also learned that the Fastjet fleet is expected to grow using a mix of aircraft ownership models and by the end of 2018, it is anticipated that approximately one-third of the fleet will be leased, a third equity financed, and a further third debt-financed. Fastjet will also use the proceeds of yesterday’s placing to expand its existing operations and expects to further increase the frequency of flights on all its current routes, linking domestic destinations with routes such as Mwanza to Kilimanjaro, and add more international destinations such as Nairobi, Lilongwe, Mombasa, and Lubumbashi to the Tanzanian network. A further opportunity includes the operation of 5th freedom flights through Entebbe, where Air Uganda has ceased operations and left a void in air connectivity.
In closing his statements, Ed Winter added: “In the past two years, we have established very strong foundations in Africa and demonstrated we can manage our way through challenging regulatory restrictions, operate to a high standard of reliability and operational performance, build an award-winning and relevant brand, establish and grow effective distribution channels, and trade profitably.”