Fastjet Group has warned that its status as a going concern could be jeopardized if its major shareholders fail to participate in an urgent equity fundraising drive.

The African low-fare carrier group's cash position has been significantly hampered by its inability to access USD5.4 million worth of revenue derived from its Fastjet Zimbabwe (FN, Harare International) unit. To mitigate this shortfall, on June 5, Fastjet entered into unsecured loan agreements with private equity firm Annunaki Investments and Mauritius-based SSCG Africa Holdings in order to make available a portion of the Group's restricted cash held within Zimbabwe.

Against the backdrop of a severe shortage of foreign currency on Zimbabwe's official market, Fastjet Group had to lend USD5 million cash from Fastjet Zimbabwe to Annunaki in return for a USD2 million loan to Fastjet from SSCG. The funds were then put towards general working capital purposes across the Group.

As of June 18, 2018, Fastjet had a cash balance of just USD3.3 million given its recent purchase of equity in three ATR72-600s due for delivery, further operating cash outflows, and a creditor reduction. USD1.75 million of this is restricted cash in Zimbabwe net of the aforementioned loan swap agreements.

Given the difficult scenario it finds itself in, Fastjet said in a disclosure to the London Stock Exchange on Wednesday, June 27, that it was currently in active discussions with its major shareholders over yet another recapitalization of the business but that a common consensus had yet to be reached.

"Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome," it 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 December 31, 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 [a sub-market of the London Stock Exchange]."

As of March 29, 2018, Fastjet Group's major shareholders included South African ACMI/charter specialist holding firm Solenta Aviation Group with 29.91%, M&G Investment Management with 19.99%, Janus Henderson Investors with 9.00%, Majedie Asset Management with 8.88%, Liberum Capital with 7.47%, JO Hambro Capital Management with 5.54%, GAM London with 5.43%, and the Fastjet plc Employee Benefit Trust with 4.12%.