Low-cost carrier, fastjet plc contemplates selling its Zimbabwe unit to a consortium led by its major shareholder Solenta Aviation for US$8m citing persistent volatility and uncertainty in the southern African country.
Fastjet Chief executive officer, Mark Hurst said yesterday: “The disposal, if agreed and implemented, would be expected to de-risk the significant uncertainty and cash drain that shareholders have historically suffered and allow the group to continue operating under a more stabilised and simpler model.”
Zimbabwe’s economic conditions have deteriorated significantly, a situation that has made it difficult for companies to continue operating viably. The proposed exit from Zimbabwe, which is being ravaged by hyperinflation and foreign currency shortages among many other challenges, will help the loss making company continue operating until 2021.
Fastject, which was launched in 2012, and modelled around EasyJet and Ryanair, said if the restructuring plans do pan out by the end of February next year, it would not be able to continue trading as a going concern.
The group is expecting to narrow its loss after tax of about US$8m this year, compared to a loss of $65m in prior year. Last October, Fastjet announced it closed its Mozambique unit amid supply and demand challenges.