A budget airline founded by Sir Stelios Haji-Ioannou is set to go bust unless investors bail it out.
Shares in Fastjet, which has been dubbed the Easyjet of Africa, plunged 70 per cent as it revealed urgent talks with shareholders.
The firm warned it could be forced to stop trading on London’s junior stock exchange if a deal wasn’t reached.
Turbulence: Sir Stelios Haji-Ioannou’s Fastjet was dubbed the Easyjet of Africa
The company sounded the alarm after admitting it had burned through more than half its remaining cash in a month.
Fastjet was launched with fanfare as the Easyjet equivalent for Africa, offering budget fares to fly between the region’s different nations.
However, it has been beset with problems with investors warning over high costs and management based in the UK.
On May 24 Fastjet said it had about £5.7m but by June 18 this had fallen to just £2.5m. About £1.3m of the remaining sum is tied up in Zimbabwe.
In a gloomy statement yesterday, the firm begged shareholders for more money.
It said: ‘The company is currently in active discussions with its major shareholders regarding a potential equity fundraising.
‘Whilst initial discussions with certain shareholders have been positive, discussions are ongoing and there can be no guarantee of a successful outcome.’
Haji-Ioannou, who was a top Fastjet shareholder but now owns just 1.6pc, said he was disappointed it was embroiled in fresh turmoil.
The billionaire led shareholder revolts in 2016 that ousted former chief executive Ed Winter and chairman Colin Child, after the company reported a £25m loss. Under boss Nico Bezuidenhout, the firm has been trying to turn around its finances and make efficiency savings. But yesterday Haji-Ioannou said: ‘I have been increasingly concerned over the last few years at the way Fastjet was being run – first by Ed Winter and his team and now by Nico Bezuidenhout.
‘This prompted me on several occasions to indicate my concerns about the company’s management and vote my shares accordingly.’
The latest crisis comes after years of turbulence at the South African airline, which was set up in 2012. It serves countries including Tanzania, Zimbabwe and Mozambique.
When it first launched commercial flights, Fastjet’s shares were worth around 2800p, but since then they have fallen by more than 99 per cent. Fastjet previously went to investors for cash in 2016 and 2017 and announced it had taken out a loan of £1.5m earlier this month.
For the 12 months to September 29 it reported a loss of £13.2m, narrowing from £31.4m the previous year.
Shareholders will vote on its latest fundraising plans at the company’s annual general meeting on Friday. Yesterday Fastjet shares fell 76.1 per cent, or 11.8p, to 3.7p.