Fastjet secures funding to expand in Africa

Africa's first low-cost carrier, fastJet, has secured funding that will enable it to further working capital and plan for its expansion in Africa.

Africa's first low-cost carrier, fastJet, has secured funding that will enable it to further working capital and plan for its expansion in Africa.

The £15.68m zero coupon convertible securities will be provided by Bergen Global Opportunity Fund, and will mitigate the effect of potential dilution to existing shareholders.

fastJet's Chief Executive Officer, Ed Winter, said: "This agreement with Bergen gives us access to very significant funding over the next year on a flexible basis and will provide us with a solid platform on which to grow the business and expand our operations in Africa.

"The investment structure potentially reduces the dilution to existing shareholders and gives us the opportunity to restructure parts of the business and adapt our business model in the light of our experience so far in Africa.

"Securing this funding will assist us in our core objective of making fastJet the first pan-African low-cost airline and meeting the growing demand for air travel across the continent."

The securities will be issued in six tranches, the first of which will have the nominal value of around £2.56m and a term of 18 months. The remaining five will have a value of £2.625m. The subsequent convertible securities will have a term ending 15 months after the date of issuance of the second convertible security.

The company will have the right to repurchase the securities for cash at their nominal value (and without a fee or penalty) within a certain redemption period, it said.

fastJet will also issue Bergen with 44m ordinary shares of £0.01 at par, which will be admitted for trading on or around March 13th.

Bergen may be required to make a further payment to fastJet once all of the obligations of the agreement have been finally met and no security remains outstanding, depending on the price of shares at the time.

fastJet's share price rose 7.48% to 2.88p in opening trade.

NR

Recommended

Share tips of the week – 22 October
Share tips

Share tips of the week – 22 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
22 Oct 2021
Three dividend stocks from the dynamic Asia/Pacific region
Share tips

Three dividend stocks from the dynamic Asia/Pacific region

Professional investor Sat Duhra of the Henderson Far East Income investment trust highlights three of his favourite stocks.
18 Oct 2021
Share tips of the week – 15 October
Share tips

Share tips of the week – 15 October

MoneyWeek’s comprehensive guide to the best of this week’s share tips from the rest of the UK's financial pages.
15 Oct 2021
Trading: stash the family cash in this cheap wealth management firm
Trading

Trading: stash the family cash in this cheap wealth management firm

Wealth management is a growth market. Rathbone Brothers should be a prime beneficiary – and looks cheap. Matthew Partridge explains the best way to pl…
12 Oct 2021

Most Popular

How to invest as we move to a hydrogen economy
Energy

How to invest as we move to a hydrogen economy

The government has started to roll out its plans for switching us over from fossil fuels to hydrogen and renewable energy. Should investors buy in? St…
8 Oct 2021
How to invest in SMRs – the future of green energy
Energy

How to invest in SMRs – the future of green energy

The UK’s electricity supply needs to be more robust for days when the wind doesn’t blow. We need nuclear power, says Dominic Frisby. And the future of…
6 Oct 2021
The after effects of the gas-price shock
Economy

The after effects of the gas-price shock

In the wake of the recent spike in the natural gas price, we can expect slower growth, an industrial recession – and a newly assertive Russia, says Ma…
17 Oct 2021