Fastjet, the low cost African airline backed by Easyjet founder Stelios Haji-Ioannou, has raised £50m to expand its fleet of three aircraft and to open up new routes.
The company sold 5bn shares at 1p each, a near 15% discount to its share price ahead of the placing. The fundraising will more than triple its existing market capitalisation of around £20m. Its shares fell nearly 13% to 1.025p.
Fastjet was launched in November 2012, and had sold its millionth seat by December 2014.
It currently operates solely in Tanzania, and has identified five countries for future expansion (Kenya, South Africa, Uganda, Zambia, and Zimbabwe). It maintains ambitions of becoming a pan-African airline.
“We will now be able to significantly expand our fleet and customer base, grow our operations organically, add new international routes and expand the fastjet model in Kenya, South Africa, Uganda, Zambia, and Zimbabwe,”, Ed Winter, chief executive of fastjet said.
“In doing so, we look forward to bringing our safe, reliable, low cost flights to up to 210 million potential customers, 20% of Africa’s population, and to creating a new market for aviation,”.
The company said that by 2018 around a third of its fleet would be leased, a third equity financed, and a further third debt financed.
“Fastjet will also use the proceeds of the placing to expand its existing operations and expects to further increase the frequency of flights on all its current routes”, the budget airline said.
The company also announced plans to consolidate its shares after the placing, and unveiled Clive Carver as its interim chairman.
