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UPDATE - Fastjet raises £50mln to build African airline network

Published: 14:46 01 Apr 2015 BST

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-- adds detail, CEO comment --

African airline Fastjet (LON:FJET) has raised £50mln from new and existing investors as it expands its network across the continent.

The share issue, at 1p per share, more than triples Fastjet’s current market value.

Ed Winter, Fastjet’s chief executive, said it was a “transformative step towards achieving Fastjet's goal of building Africa's most successful pan-continental low-cost airline.”

The AIM-listed low-cost carrier started flying in its current form in 2012 and is backed by Sir Stelios Haji-Ioannou, who had a 10% stake prior to today’s placing and who subscribed for new shares.

Fastjet currently operates largely in Tanzania but it has applied for licences in Zambia and Zimbabwe and has also earmarked expansion into Kenya, Uganda and South Africa.

The new money will fund an expansion of its current fleet of three Airbus A319 aircraft through the acquisition of used jets.

Fastjet said it wanted to run a fleet of 40 aircraft between multiple destinations when it first set out its blueprint for a low cost African carrier.

Winter added:"The Fastjet fleet is expected to grow using a mix of aircraft ownership models and by the end of 2018, it is anticipated that approximately one a third of the fleet will be leased, a third equity financed, and a further third debt financed.

"A range of benefits will accrue from bringing purchased aircraft into the fleet, specifically balance sheet enhancement, cash flow reduction and the deferral of maintenance deposits," he said.

Since it started up, it has been dogged by legacy issues and problems getting access in countries where it is seen as a threat to state-run operators.

Tanzania has been a success and helped by lower aero fuel prices the operation there posted its first ever monthly profit in December, while also carrying its millionth passenger.

The group has also appointed Clive Carver as its new interim chairman, a post held until now by chief executive Ed Winter. A new permanent non-executive chairman is being sought.

Winter took up £130,000 worth of placing shares, while three other directors bought £70,000 worth.

A share consolidation is also planned that will see 100 shares consolidated into one.

Shares fell 10% to 1.05p.

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