Low cost airline Fastjet (FJET: AIM) has sealed a conditional agreement with African commercial aviation group Solenta for a 28% stake and discounts of up to $19.2m for Fastjet on future services.
Johannesburg-based Solenta will also be able to nominate two directors to fastjet’s board.
Fastjet's latest equity raise is worrying as it marks the the third cash call in only six months. Investors clearly believe that the agreement will help to shore up Fastjet's balance sheet and secure its immediate funding future, judging by the 14.3% share price rally to 19p.
The deal includes the provision and operation of three wet-leased aircraft with related maintenance, crew and insurance services, as well as the supply of other services for the next five years.
Solenta would appear to be an ideal ally for Fastjet as it holds regulatory approvals in operating the Embraer aircraft that Fastjet is transitioning to.
Fastjet has also raised $28.8m through an accelerated book build with Liberum Capital acting as sole bookrunner.
The airline aims to use the capital to implement the final stages of its stabilisation plan and balance its cash flow by the end of 2017.
Fastjet hopes the agreement with Solenta will provide a platform to grow and scale its business cost effectively and ensure further working capital for growth.
