Fastjet looks to sell ZImbabwe arm to avert funding crisis

vantunews 28th November, 2019
Fastjet looks to sell ZImbabwe arm to avert funding crisis

Low cost airline Fastjet has announced plans to dispose of its Zimbabwean unit. 

In a statement released on Wednesday, Fastjet said it is looking to offload the Zimbabwe unit to a consortium led by its major shareholder, Solenta Aviation, for US$8m (about R118m at current exchange rates).

Fastjet said if the restructuring plans do not pan out by the end of February, the Africa-focused company may not be able to continue trading as a going concern.

Persistent volatility and uncertainty in the Zimbabwean market would see the company report a loss after tax of around US$7m to US$8m (R103 - R118m at current exchange rates) for 2019, compared with a loss of US$65m (R960m) a year

"The group is, therefore, currently in active discussions with certain of its major shareholders to explore various options including raising equity capital and/or a restructuring of the company involving the disposal of Fastjet Zimbabwe," it said. 

"The disposal, if agreed, approved and implemented, would be expected to de-risk the significant uncertainty and cash drain that shareholders have historically suffered, and allow the group to continue operating under a more stabilised and simpler business model," its CEO Mark Hurst said.