Fastjet Shares Drop 68% As It Warns Of Financial Pressure, Cash Drain

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LONDON (Alliance News) – Fastjet PLC on Wednesday said it is actively discussing a potential equity fundraising in the absence of which there is a risk of not being able to continue trading.

At the beginning of June, the low-cost African airline had secured a USD2 million loan for working capital purposes from SSCG Africa Holdings. As at May 24, the company had a cash balance, excluding the loan agreements, of USD7.5 million, of which USD5.4 million was restricted cash in Zimbabwe.

Fastjet said it has continued to “consume” cash and, as of June 18, had a cash balance of USD3.3 million, reflecting the recent purchase of equity in the three ATR72 aircraft, further operating cash outflows, and a creditor reduction. Of this, USD1.8 million was restricted cash in Zimbabwe net of loan swap agreements.

In addition, Fastjet pushed back the release date of its 2017 results. It now said that due to the financing challenges, the annual results may not be published and shares risk to be suspended from trading on AIM.

Source: London South East