Solenta Aviation is set to acquire a 28% shareholding in Fastjet as the African low-cost carrier seeks to raise $28.8 million through a new share placing.
Under the proposed agreement, Fastjet says it will issue Solenta with 95.6 million of new shares valued at $19.2 million and will acquire Aircraft and Services Ltd, one of the South African lessor's special-purpose vehicles.
This SPV will be used by Fastjet to wet-lease three Embraer ERJ-145s from Solenta over five years, and the lessor has agreed to a corresponding $19.2 million deduction in the cost of the leases over that period.
Fastjet will be given the rights to operate the aircraft under Solenta's various air operator certificates and will have the option to change the aircraft type to Embraer 190/195s or ATR 72-600s during the lease period.
The agreement is subject to a lock-up clause under which shares will be released to Solenta on a quarterly basis but will remain "subject to certain orderly market provisions".
Pending shareholder approval, the deal will be completed by 24 January, Fastjet expects.
On the same date, the airline is, separately, to proceed with a share placing on the London Stock Exchange to raise additional funds.
The placing is again subject to shareholder approval and Fastjet warns that if it does not take place the carrier "is at risk of not being able to continue trading as a going concern" and will have to be placed in administration. Liberum is the bookrunner for the placement.
FlightGlobal understands that Solenta will become the largest shareholder in Fastjet following the placing, though this depends on whether existing stakeholders participate. The airline's website shows that M&G Investment Management is currently the biggest shareholder, with a stake of almost 20%.
Fastjet chief executive Nico Bezuidenhout says that once completed, the wet-lease agreement with Solenta and the share placing will allow the airline to "successfully implement the final stages" of its turnaround plan.