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Fastjet yet to secure critical funding lifeline

African budget carrier Fastjet has warned that it is entering a critical period, with just days left to secure crucial funding.

The loss-making airline says it is able to continue operating beyond October, owing to “some improvement” in trading and cash generation.

This has bought the struggling company further time to continue discussions with creditors and its major shareholders. It has been seeking additional funds and has also been negotiating to reduce outstanding balances, as well as capital and interest burdens.

But while discussions with certain parties have been “positive”, says the carrier, the talks are still continuing.

“There can be no guarantee of a successful outcome,” it says.

If Fastjet is unable to carry out an equity fundraising or reach an agreement with its key creditors in the “coming days”, it says the group will be “unable to continue trading as a going concern”.

The carrier had previously warned that it would need additional funding by the end of October in order to continue operating.

As of 24 October, it says, it had cash balances of $3.4 million – of which $2.7 million is restricted cash held within Zimbabwe.

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