Solenta Aviation Holdings Limited (SAHL) is set to take control of fastjet plc after acquiring an additional 24.5% stake in the UK-listed African low-fare airline.

The move comes after fastjet entered into multiple transactions which increased its equity base by at least USD40.0 million following warnings over the past 4 weeks that its weak cash position threatened its viability.

A filing with the London Stock Exchange (LSE) on Friday, November 16, said the South Africa-based aviation holding had agreed to subscribe to 316.7 million fastjet shares for a total of USD4.1 million. Solenta’s stake in the company subsequently rose from 29.8% to 54.3% while its voting shares have risen from 29.8% to 60.2%.

fastjet plc also issued 1.9 billion shares valued at USD24.4 million to acquire four E145s from Solenta and to settle other fees and charges due to the firm.

fastjet plc also issued 898.4 million new ordinary shares to raise USD11.5 million. It will also hold an open offer with qualifying shareholders of up to 411,440,871 Open Offer Shares aimed at raising up to USD5.3 million.

As previously reported, fastjet plc will indeed exit its Fastjet Tanzania unit having entered into a conditional share sale agreement with local management in Tanzania, regarding the sale of its interest in Fastjet Tanzania's holding company, fastjet Air TZ (BVI). Following the sale, valued at USD1, the Tanzanian carrier will operate as a fastjet-branded carrier.

As a consequence of fastjet plc's decision to cease funding its Tanzanian operation in September, plans to induct three ATR72-600s have now been abandoned resulting in the company incurring an early termination liability. According to the LSE filing, along with other settlements, the firm will spend up to USD3.7 million to cover major creditor settlements associated with the decision to stop funding Fastjet Tanzania.

In terms of its Fastjet Zimbabwe operations, fastjet plc said it has also moved to exercise its existing option to acquire the 51% stake held by a local Zimbabwean holding and transfer the shares to a Zimbabwean company in consultation with Solenta. In addition, the decision to acquire the four E145s from Solenta will help generate lease savings of around USD220,000 per month in hard currency outflows for its Zimbabwean operations.

"By owning the existing leased assets (as opposed to fixed monthly lease cash outflows), along with utilising the Solenta infrastructure in Mozambique (e.g. no fixed cost), fastjet has flexibility to scale operations down materially in the event of aggressive new competitor market-entry," it said. "Similarly, the four Embraer 145s represent an effective increase in available aircraft capacity (previously three Embraer 145s used in active service and one as backup), which will support the additional route rights received by fastjet Zimbabwe allowing it to operate double-daily frequencies between Harare International and Bulawayo (previous authority was limited to one daily flight), and support measured growth in Mozambique through frequency increases on existing and/or new routes, as and when required."

Concerning Fastjet Mozambique, fastjet plc said the virtual carrier is benefiting from strong market conditions and is expected to deliver up to around USD23.0 million in revenue in 2019. As such, with the prospect of more routes being opened up in Mozambique, the carrier is expected to turn cash-flow positive in 2020.

In South Africa, the profitable Federal Airlines (South Africa) will provide a base from which Fastjet South Africa can gradually enter the South African market during 2019.