News blog

fastjet

BY: Andrew Hore |
POSTED: 14/03/2016 |

Africa-focused airline fastjet has tried to dissuade major shareholder easyGroup from requisitioning a general meeting following the departure of two executive directors.

easyGroup wanted to remove chief executive Ed Winter, even though he had said that he was leaving after a replacement was found, and fellow executive Krista Bates from the board. Both of them leave this week even though the new chief executive has not been identified. Colin Child will become executive chairman and move back to non-executive after a new chief executive joins the company.

Sir Stelios Haji-Ioannou, the boss of easyGroup, has concerns about the fastjet cost base, which includes a head office at Gatwick. The recent trading statement seems to suggest that his fears are well-founded.

easyJet founder Sir Stelios was employed as a consultant by fastjet back in 2011 in order to help to set up the airline. He was given an initial 5% stake and the right to subscribe for a further 10%. On top of that he got a royalty of 0.5% of revenues for the use of fastjet.com over a ten year period but this was terminated in return for the issue of £1.51m of shares at the equivalent of 160p each and a £1m subscription in a placing at the same price. He owns 12.6% of fastjet through easyGroup after a recent share purchase.

fastjet has been successful in raising money, and then spending it, but the share price has fallen sharply over the past three years from the equivalent of £28, after two share consolidations, to 67.25p.

There was still more than $20m of cash in the balance sheet at the end of February and the board admits that it may need to raise more funds.

At 36.25p a share, fastjet is valued at £24m.

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