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.
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"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.
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"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.
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