fastjet PLC is set to become privately held following its delisting from the London Stock Exchange (LSE) AIM platform on Monday, August 24.

The move will allow the lossmaking UK-based firm, which holds stakes in Fastjet Zimbabwe (FN, Harare Int'l) as well as Federal Air (7V, Durban Virginia) in South Africa, to make significant savings given the strenuous costly oversight requirements of maintaining a listing on AIM. It was also a key requirement laid down by main shareholder Solenta Aviation Group for its continued participation in future recapitalisation efforts.

Solenta has already indicated its willingness to underwrite a capital raise following the delisting and registration of fastjet PLC as a private company which is expected to be completed by the end of September 2020. Solenta has confirmed that it would be prepared to underwrite a capital raise of at least USD1.5 million if called on by the Board, but on terms that still need to be negotiated and agreed.

Trading in fastjet PLC stock will continue albeit through the Asset Match platform.

In one of its final AIM disclosures, issued on August 20, fastjet PLC gave an update regarding an objection lodged by FedAir shareholder Carl Trieloff wherein he claimed the sale of FedAir shares to Parrot Aviation Proprietary Limited, a fastjet PLC vehicle, had been invalidated owing to a technical breach.

Aside from Trieloff, who owns 18.85% of FedAir, the holders of FedAir's remaining 81.15% confirmed their intention to offer back their shares to Parrot through a new share sale agreement in order to resolve the technical breach.

"Following legal advice, Parrot entered into a new share sale and purchase agreement on August 14, 2020 with the Selling Shareholders (which includes Solenta Investment Holdings), excluding Trieloff, for 81.15% of the share capital of FedAir. The financial terms were identical to the original SPA with the only substantive difference being the amendment to the condition that resulted in the technical breach," it said.

However, given Trieloff also made a further claim, which fastjet deemed "unsubstantiated", for certain pre-emptive rights over all shares subject to any resale, if restituted and resold, he now has a 30 business day pre-emptive right to acquire the 81.15% from the other selling shareholders. Should he exercise the right, Trieloff will have to pay fastjet PLC USD2.585 million, effectively reversing the earlier share sale agreement. But in the event he doesn't, Parrot has agreed under a new share purchase agreement to reacquire the 81.15% shareholding held by the selling shareholders, excluding Trieloff. This would not involve the exchange of any consideration.

Parrot would then engage separately with Trieloff on his own intentions, which could be to either enter a new sale agreement with him to sell his shares to Parrot thereafter, or alternatively for Trieloff to remain an 18.85% shareholder in FedAir, which would require the return of the sale proceeds originally paid to him under the original share purchase agreement.

Meanwhile, in Zimbabwe, fastjet plc has secured Reserve Bank of Zimbabwe (RBZ) consent to register certain historic Group intercompany loans made to Fastjet Zimbabwe with a value of USD22,524,738 as a legacy loan and a further USD2,716,376 of fastjet plc creditors in Zimbabwe as blocked creditor funds.

The recognitions are crucial given the Zimbabwean government's decision last year to abandon the US dollar in favour of a new Zimbabwe dollar with all legacy debts (including contractual obligations) and exitsing bank balances converted at the time on a 1:1 parity basis. The new Zimbabwe dollar has since cratered in value to ZWL82.9 (official) to the greenback while the black market rate stands at ZWl122.2.

"The Company is awaiting the final position from the RBZ on the next steps to expunge balances under the Legacy Loan, as new legislation is being drafted to govern this. In the meantime, the RBZ has allowed the Company to draw against the Legacy Loan in ZWL currency (Zimbabwe local currency) to settle fastjet Zimbabwe creditors of USD3,577,173," it said.

As with all other investors in Zimbabwe, fastjet PLC warned that given the shortage of foreign currency in the country, there was no guarantee of continued access to the legacy loan facility.