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Fastjet faces going out of business today on cash crisis



A Fastjet plane. FILE PHOTO | NMG
A Fastjet plane. FILE PHOTO | NMG 

Low-cost African airline Fastjet could effectively go bust on Friday if further funds are not found from its shareholders and investors.

The troubled airline set up by easyJet founder Sir Stelios Haji-Ioannou, flies in several African countries including South Africa, Tanzania and Zimbabwe but has been in financial trouble for some time and withdrew its flights from Kenya in 2016.

It lost an average of $50m a year up until 2016 and has yet to file its 2017 results, which have to be published by Friday for it to remain listed on London’s AIM exchange

The company now says that if no new funds emerge, Fastjet may not be "able to continue trading as a going concern".

The result was that within hours of the announcement Fastjet lost more than two-thirds off the value of its shares in a matter of hours.

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“Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome,” it warned on Wednesday.

The airline started operating in 2012 with the backing of easyJet’s founder but has “continued to consume cash”, and it now had just $3.3m in its reserves.

Fastjet launched in Tanzania with an ambition to become a pan-African low-cost carrier, but it has struggled throughout with problems.

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