Fastjet warns of imminent cash crunch as critical talks continue
By Abigail Townsend
Date: Monday 27 Jan 2020
(Sharecast News) - Africa-focused carrier Fastjet warned on Monday that it only had enough cash to see it through to the end of the quarter, as critical discussions over its future continued.
Updating the market on trading, the embattled low-cost airline said that it would require further funding by the end of February "to enable the group to continue to operating in its current form".
It continued: "The directors believe, based on current financial projections and funds available and expected to be made available, that the group will have sufficient resources to meet its operational needs until the end of March, subject to forecast revenues not being impacted by any unforeseen circumstances."
Fastjet is in what it termed "active discussions" with a consortium led by Solenta Aviation Holdings, its biggest shareholder, about the disposal of fastjet Zimbabwe. Fastjet has operations in both Zimbabwe and South Africa.
"The investor consortium is finalising its due diligence on fastjet Zimbabwe and securing the required regulatory approvals," the airline said.
But it also warned: "If the group is unable to carry out the restructuring proposal by the end of March 2020, it would be unable to continue trading as a going concern."
Fastjet first announced plans in November to sell the Zimbabwe operations for $8m, which at the time it said would help it continue until 2021.
Trading to the year end, which included the peak holiday season, was in line with management's expectations, fastjet confirmed, with revenue expected to come in at $42m, compared to $39m a year earlier, and with reduced losses of $7m, against $65m in 2018.
As at 23 January, cash reserves were $3m, of which $700,000 was in Zimbabwe and "currently unrestricted", it added.
London-listed fastjet, which was co-founded by easyJet entrepreneur Stelios Haji-Ioannou, where trading 1% higher at 0.17p by 1300 GMT.
"The investor consortium is finalising its due diligence on fastjet Zimbabwe and securing the required regulatory approvals," the airline said.
But it also warned: "If the group is unable to carry out the restructuring proposal by the end of March 2020, it would be unable to continue trading as a going concern."
Trading to the year end, which included the peak holiday season, was in line with management's expectations, fastjet confirmed, with revenue expected to come in at $42m, compared to $39m a year earlier, and with reduced losses of $7m, against $65m in 2018.
As at 23 January, cash reserves were $3m, of which $700,000 was in Zimbabwe and "currently unrestricted", it added.
London-listed fastjet, which was co-founded by easyJet entrepreneur Stelios Haji-Ioannou, where trading 1% higher at 0.17p by 1300 GMT.
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