FastJet mulls southern African base amid new share offer

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FastJet will use funds from a new share offer to explore the possibility of opening a base in southern Africa, amid reports that it had been close to investing in South Africa's now-defunct 1time Airline.

The pan-African low-cost carrier, which is due to launch operations in east Africa later this month, announced on 12 November that it will raise $2.4 million by issuing 42 million new ordinary shares at a value of £0.035.

"These additional funds will be deployed in assessing an earlier than expected opportunity open to FastJet to interact with the southern African marketplace, and progressing with the opening of further operational hubs for the FastJet network across Africa‚" says executive chairperson David Lenigas.

FastJet plans to launch operations this month with three Airbus A319s in Dar es Salaam, Tanzania, before opening a second east African base in Nairobi, Kenya.

Two west African bases in Accra, Ghana and Luanda, Angola are due to follow in 2013, with the carrier ramping up its fleet to about 15 aircraft by year-end. To date, however, FastJet has not announced plans to establish any bases in southern Africa.

South African trade union Solidarity claimed earlier this month that FastJet had been negotiating a possible buyout of 1time prior to its liquidation. It said FastJet's withdrawal of interest ultimately led to the failure of the business-rescue plan - equivalent to Chapter 11 restructuring in America.

A spokesperson for the pan-African start-up declined to confirm that talks had taken place with 1time, saying: "FastJet is continuously looking at ways in which it can grow its African business, whether organically or through acquisition. At any particular time we may be studying several strategic opportunities, but as a matter of policy we will not make any comment unless and until it is appropriate to do so."

Lonrho Aviation became the majority shareholder in FastJet when the latter completed a reverse takeover of the African firm for $85.7 million. Its 67.4% stake in the London-listed carrier will now fall to 65.8% following the share offer.

Stelios Haji-Ioannou's EasyGroup also holds 5% of the company, with the option of acquiring a further 10%. The conglomerate is due to receive royalties equivalent to 0.5% of FastJet's revenue.