Fastjet crashes after warning it could go bust

Fastjet shares crashed on Wednesday as the low-cost African airline said it runs the risk of going bust unless it manages to secure fresh funding from shareholders.

The company said it is currently in "active discussions" with its major shareholders about a potential equity fundraising. In the absence of a cash injection, however, the group is "at risk of not being able to continue trading as a going concern".

Fastjet said that since entering into unsecured loan agreements earlier this month, it has continued to consume cash. As of 18 June, it had a cash balance of $3.3m, reflecting the recent purchase of equity in the three ATR72 aircraft, further operating cash outflows and a creditor reduction.

"Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome," the group said.

"It is expected that any equity fundraise will be concluded in conjunction with the announcement of the company's annual results for the year ended 31 December 2017. If the fundraise is not successful it will result in the annual results not being published and the company being suspended from trading on AIM."

At 0935 BST, the shares were down 71% to 4.55p.