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

Broker safety – your questions answered
Investment strategy

Broker safety – your questions answered

Cris Sholto Heaton answers more of your questions about the safety of stockbroker accounts
25 Mar 2020
How demographics affects stock valuations
Investment strategy

How demographics affects stock valuations

New research suggests that stock and bond valuations are driven by the age of the population – at least in the US.
24 Feb 2020
Do you own shares in Sirius Minerals? Here’s what you need to do now
Stocks and shares

Do you own shares in Sirius Minerals? Here’s what you need to do now

Mining giant Anglo American has proposed a cash takeover of Yorkshire-based minnow Sirius Minerals. Unhappy shareholders must decide whether to accept…
20 Feb 2020
Why investors should be “cautiously bullish” for 2020
Stockmarkets

Why investors should be “cautiously bullish” for 2020

Analysts have been out in force making rosy predictions for stockmarkets in 2020, but while there is certainly a case for optimism, investors should r…
17 Jan 2020

Most Popular

Here’s why you really should own at least some bitcoin
Bitcoin

Here’s why you really should own at least some bitcoin

While bitcoin is having a quiet year – at least in relative terms – its potential to become the default cash system for the internet is undiminished, …
16 Sep 2020
Will a second wave of Covid lead to another stockmarket crash?
Stockmarkets

Will a second wave of Covid lead to another stockmarket crash?

Can we expect to see another lockdown like in March, and what will that mean for your money? John Stepek explains.
18 Sep 2020
James Ferguson: How bad data is driving fear of a second wave of Covid-19
UK Economy

James Ferguson: How bad data is driving fear of a second wave of Covid-19

Merryn and John talk to MoneyWeek regular James Ferguson about the rise in infections in coronavirus and what the data is really telling us.
17 Sep 2020