Notice of General Meeting - 2 April 2015

fastjet PLC

(“fastjet” or the “Company”)

Proposed Consolidation of Existing Ordinary Shares

Placing of 50,000,000 New Ordinary Shares

Notice of General Meeting

fastjet announces that it will today be posting notice of a GM of the Company to all shareholders and will also make the notice available on the Company’s website ( The GM will take place at the Lingfield Suite, Hilton Hotel, South Terminal, Gatwick Airport, Gatwick RH6 0LL at 9.00 a.m. on 20 April 2015.


The Board was pleased to announce on 1 April 2015 the conditional placing of 50,000,000 New Ordinary Shares (post consolidation) with institutional and other investors at a placing price of £1.00 per New Ordinary Share to raise £50 million before expenses. The Placing Price assumes the approval and completion of the Consolidation and accordingly is equivalent of 1 pence for Existing Ordinary Shares of 1p each.

The Placing is conditional on, inter alia, the Consolidation and upon Shareholders giving authority to the Directors at the general meeting to allot and issue the Placing Shares and to dis-apply the statutory rights of pre-emption that would otherwise apply in respect of such an allotment and issue. The Placing is also conditional upon Admission.

The Existing Ordinary Shares have a nominal value of 1p and have in the last month traded within a range of 1.3 p to 1.175 p. At these share price levels, this tends to mean that small absolute movements in the share price represent large percentage movements, resulting in unwarranted share price volatility. In addition, the Directors believe that the bid/offer spread at these price levels can be disproportionate and to the detriment of Shareholders. Furthermore, there has been a strong desire expressed by certain institutional investors with which the Placing Shares are being placed, to consolidate the Existing Ordinary Shares to create a smaller number of shares with a proportionately higher market value. Accordingly, the Placing is also conditional upon the consolidation of the Existing Ordinary Shares into New Ordinary Shares on the basis of 1 New Ordinary Share for each 100 Existing Ordinary Shares held on the Record Date. Further details of the proposed Consolidation are set out below.

With the Company now in a position to move on to the next phase of its growth and, with the firm capital base to be established as a result of the Placing, the Board has concluded that it is now an appropriate time to establish a suitable structure for employee and directors share incentives.

The purpose of this announcement is to provide you with information about the background to, and the reasons for, the Placing, to explain why the Board considers the Placing to be in the best interests of the Company and its Shareholders as a whole, and why the Directors recommend that you vote in favour of the resolutions to be proposed at the GM and, in particular, the Authorising Resolution.

Background to the Fundraising

fastjet is the holding company of fastjet Airlines Limited (Tanzania), a low cost airline which operates flights under the fastjet brand in Tanzania using a fleet of three Airbus A319 aircraft. By adhering to international standards of safety, security, quality and reliability, fastjet has brought a new flying experience to the African market at low prices. fastjet’s long-term strategy is to become the Continent’s most successful pan-African low cost airline. fastjet is also the holding company of Fly540 Ghana and Angola.

The fastjet low cost airline was launched in Tanzania on 29 November 2012. It carried more than 350,000 passengers in the first year of operations and sold one million seats by December 2014. Comparing 2014 with 2013, passengers flown increased by 63 per cent, capacity rose by 62 per cent and load factor increased by one percentage point to 73 per cent. During the same period, the average revenue per passenger, including ancillary sales, increased by 27 per cent. fastjet currently has three domestic routes operating in Tanzania linking Dar es Salaam with Mwanza, Kilimanjaro and Mbeya, and four international routes from Dar es Salaam to Johannesburg, Harare, Entebbe and Lusaka.

38 per cent of fastjet’s passengers surveyed six months after the commencement of fastjet operations were first time fliers. A similar survey conducted in December 2014 showed 35 per cent of passengers surveyed as first-time fliers, with the airline continuing to stimulate the market. The Directors believe this demonstrates that fastjet’s low cost airline model works in sub-Saharan Africa and is effective in stimulating and growing the market with customer acceptance of the model developing rapidly. The booking window (days between booking and flight) has increased significantly with customers quickly understanding and adopting the “book early for cheapest seats” model.

Feedback on customer satisfaction during 2014 has been positive, with 95 per cent of fastjet customers surveyed confirming that they would fly with fastjet again and 9 out of 10 stating that they would recommend fastjet to friends.

In order to offset Africa’s lower rates of commercial activity on the Internet and low credit and debit card usage, fastjet continues to develop award-winning customer communication platforms including the extensive use of social media such as Facebook and Twitter. fastjet has further developed innovative booking channels to maximise opportunities for customers to book fastjet tickets. For example, mobile phone penetration throughout Africa is very high and the fastjet website is optimised for use on smart phones. fastjet customers increasingly use mobile phone payment methods such as M-Pesa and Tigo to pay for seats. Up to 30 per cent of revenues are transacted through mobile money channels.

fastjet’s Tanzanian operation, which comprises a well-recognised brand name and both domestic and international routes, means that it is now well placed to further develop its existing Tanzanian operations. The current fleet of three aircraft is now almost fully utilised and growth opportunities will require increased numbers of aircraft over the remainder of 2015. This will enable fixed overhead costs to be further spread over a larger operation.

In December 2014, fastjet Tanzania achieved its first profitable month of operations, which was a major milestone for the Company. The key contributors to this were the maximisation of fleet capacity and improved revenue per passenger. Further contributors were load factor (the number of “passengers” as a percentage of the number of available seats flown) and a reduction in aviation fuel cost.

In December 2014, with no growth in its fleet, fastjet Tanzania operated its aircraft for 10.2 hours per day, compared to 5.5 hours per day in December 2013. This increased flying delivered 71 per cent more seats for sale, resulting in an additional USD 2.5 million revenue with no increase in fixed aircraft costs. A maturing brand and high season demand contributed to an average revenue per passenger growth of 20 per cent, adding just under USD 1.2 million of additional revenue and a passenger load factor increase of 3 per cent delivering a further USD 0.2 million of revenue. Comparing year-on-year market fuel prices, fuel prices dropped 16 per cent, delivering USD 0.4 million of volume adjusted cost improvement.

fastjet expects to further increase the frequency of flights on all its current routes, linking domestic destinations with routes such as Mwanza to Kilimanjaro, and to add more international destinations such as Nairobi, Lilongwe, Mombasa and Lubumbashi to the Tanzanian network in line with consumer demand. A further opportunity includes the operation of 5th freedom flights through Entebbe, where Air Uganda has ceased operations and has left a void in air services.

Having successfully established the low cost model in Tanzania, fastjet is confident it can use the current operation as a foundation to fulfil the strategy of becoming the Continent’s most successful pan-African low cost airline. The low cost model has stimulated the Tanzanian market in the same way as other such markets elsewhere in the world were stimulated by its introduction. The Tanzanian consumer has embraced the brand and model with speed and enthusiasm. High utilisation and reliability, with punctuality of over 90 per cent, have been achieved within the infrastructure constraints of Africa. Experience gained whilst establishing the current operations will be deployed during the expansion into other countries and territories.

Building on the success of the Tanzanian operation, fastjet plans to roll out the model across the Continent. The airline has identified five countries – Kenya, Uganda, Zambia, Zimbabwe and South Africa – as key markets for expansion of its business plan. The total population of these countries, including Tanzania, is 210 million people, which represents approximately 20 per cent of the total African population. These countries are also English speaking with strong historical links to one another. The geographical proximity of these countries facilitates significant synergy opportunities including aircraft maintenance. The business plan includes growth to a total fleet of up to 34 aircraft by the end of 2018 providing approximately ten million seats per year on a potential domestic and regional network of up to 40 destinations, including all key domestic and regional routes in and from our six target countries. This would represent an approximate 13 per cent market share of management’s assessment of the 2018 regional and domestic air travel market in these six countries. Assuming that average customers make two return trips per year, the business plan is targeting just 1 per cent of the population or approximately 10 per cent of the target market within that population.

Company structures

African aviation is not liberalised, with each country retaining regulatory control of its own route rights through a series of Bilateral Air Service Agreements. To comply with airline ownership regulations, fastjet already has or will establish a fastjet operating company in each of the target countries listed above. These will all have shareholding structures designed to fully comply with legislation whilst maximising fastjet’s economic interest. There will be no loss of economic benefit unless there are fully participating local shareholders.

Each fastjet operating company will benefit significantly from centralised functions which will provide economies of scale and knowledge sharing. A Group approach to contracts and service providers will enable further efficiencies and reduced fixed costs. The overall fleet structure will be designed to optimise fastjet Group aircraft utilisation. A centre of expertise will develop and support fastjet airlines across the region. Centralised services will be geographically located for optimum costs and performance. Internal services will be designed to deliver synergy benefits across the countries. Areas such as safety management systems, maintenance, pilot selection and training and flight data monitoring will be maintained to international standards and centralised to control safety and security across all subsidiaries.

fastjet will charge the operating companies management fees and royalties for the central services provided. In addition, many centrally procured and managed services will be available to the operating companies at costs more favourable than each operating company could obtain in an open market, for example aircraft leases, insurance and maintenance services.

Whilst each operating company will be operated by local management, satisfying local regulatory requirements, fastjet will be presented as one airline to the customer with absolute consistent delivery of brand, safety, reliability, customer service and quality. An optimised integrated network and revenue management system will maximise value.

Current Trading and Outlook

Trading for the year ended 31 December 2014 was broadly in line with market expectations. The results for the year are expected to be published in Q2 2015, following completion of the audit process. Growth for 2015 is expected to come both from existing routes from our Tanzania base and the addition of new fastjet operations in Zambia and Zimbabwe.

Use of Proceeds

fastjet is conditionally raising £50 million (approximately USD 75 million) (before expenses) by way of the Placing. The net proceeds of the fundraising will be deployed in two key areas – expansion working capital and the acquisition of aircraft.

There is a working capital requirement to fund further expansion and the launch and growth of operations in Kenya, South Africa, Uganda, Zambia and Zimbabwe.

fastjet will use funds raised in excess of that needed for its working capital requirements to commence an aircraft acquisition programme of used Airbus A319 aircraft.

Fleet Ownership

The fastjet fleet is expected to grow using a mix of aircraft ownership models and by 2018, it is anticipated that approximately one third of the fleet will be leased, a third equity financed, and a further third debt financed. The aircraft fleet will be leased by the fastjet Group to the operating companies as required.

fastjet believes that a range of benefits would accrue from bringing purchased aircraft into the fleet, specifically balance sheet enhancement, cash flow reduction and the deferral of maintenance deposits.

fastjet has already established that there is more than sufficient availability of suitable aircraft and that current market pricing (operating lease and purchase options) represents an optimum commercial proposition.


The fastjet management firmly believes that it has established very strong foundations from which to achieve its objective of building Africa’s most successful pan continental low cost airline. It has demonstrated that it can manage its way through challenging regulatory restrictions, operate to a high standard of reliability and operational performance, build an award-winning and relevant brand, establish and grow effective distribution channels and trade profitably.

fastjet intends to further develop its operations by growing organically and with the addition of new international routes, by launching operations in five specific countries and by growing its fleet and customer base.

Further details of the Placing

The Placing is being conducted, other than in relation to the Republic of South Africa (in respect of which see further below), by way of an Accelerated Book-Building process led by Liberum as Global Co-Ordinator and Liberum and WH Ireland as Joint Bookrunners. In relation to the Republic of South Africa, Sanlam has been engaged by the Company as broker to the South Africa market to use its reasonable endeavours to procure institutional investors in the South Africa market for Placing Shares at the Placing Price.

Completion of the Placing is conditional on, inter alia: (a) the approval of Shareholders of the Authorising Resolution at the GM; and (b) Admission taking place not later than 8.00 a.m. on 22 April 2015 or such later date as may be agreed with the Joint Book Runners being not later than 15 May 2015.

The Placing Shares will be issued credited as fully paid and will rank pari passu with the Existing Ordinary Shares, including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of such shares after the date of their issue.

Under the terms of the Placing Agreement fastjet has agreed, conditional upon Admission, to issue Warrants to Liberum and to Sanlam to subscribe for 675,838 New Ordinary Shares at the exercise price of 100p per share. In addition fastjet has agreed, conditional upon Admission, that the time for the exercise of the existing Warrants granted to WH Ireland in respect of up to 27,927,494 Ordinary Shares of 1p at a price of 1.6p per share (which following the Consolidation will be adjusted to warrants over 279,275 New Ordinary Shares at an exercise price of £1.60 per share) will be extended by a period of 12 months.


Under the terms of paragraph one of the Authorising Resolution the Existing Ordinary Shares of 1 pence each will be consolidated into the New Ordinary Shares on the basis of one New Ordinary Share of £1 each for every 100 Existing Ordinary Shares held at the Record Date.

Where a Shareholder’s holding of Existing Ordinary Shares either comprises less than 100 Existing Ordinary Shares or is not a multiple of 100, all such fractional entitlements that would otherwise arise in respect of Shareholders’ holdings of Existing Ordinary Shares will be aggregated and consolidated into New Ordinary Shares and will be sold for the benefit of the Company.

As a consequence of the Consolidation, each Shareholder’s holding of New Ordinary Shares will (ignoring fractional entitlements) immediately following the Consolidation becoming effective, be one hundredth of the number of Existing Ordinary Shares held by them on the Record Date. However, each Shareholder’s proportionate interest in the Company’s issued ordinary share capital (before the issue of the Placing Shares) will remain substantially unchanged as a result of the proposed Consolidation.

If the Consolidation is approved, the New Ordinary Shares will be admitted to trading on AIM with ISIN: GB00BWGCH354.

New share certificates representing New Ordinary Shares are expected to be sent to Shareholders who hold shares in certificated form within 10 business days of the date of Admission. On receipt of the new share certificates, all previous share certificates will be superseded and can be destroyed. If you do not receive a new share certificate and you believe you are entitled to one please contact the Company’s registrars, Neville Registrars Limited, Neville House, 18 Laurel Lane, Halesowen, West Midlands, B63 3DA.

Shareholders who hold their entitlement to Existing Ordinary Shares in uncertificated form through CREST are expected to have their CREST accounts credited with New Ordinary Shares on 21 April 2015.

Board changes

I have been interim Chairman and Chief Executive since 10 June 2013. To allow me to fully focus on the growth of the business from the deployment of the Placing proceeds Clive Carver (who is already a non-executive director of the Company) has been appointed interim non-executive Chairman. He will take the lead in finding an appropriate long-term non-executive Chairman of the Company for the next stage in the Company’s development.

Incentive arrangements

The Company intends to adopt a Company Share Option Plan (CSOP) to be used to incentivise and retain Directors and employees following the Placing. The Directors’ intention is that the incentive arrangements will in aggregate have a dilution limit of no more than 10 per cent of the issued ordinary share capital of the Company, from time to time, that should be issued or issuable under all share incentive schemes operated by the Group in any rolling ten-year period.

The Company has, conditional on the completion of the Placing, made awards for 5 per cent of the Enlarged Share Capital immediately following the completion of the Placing.

The following is a brief summary of the plan.

The CSOP is a discretionary employee share plan under which options over ordinary shares in fastjet may be granted on a tax-favourable basis, up to £30,000 in value at grant. The CSOP will also allow for larger non-tax efficient options to be granted on the same terms.

Options granted under the plan will have an exercise price not less than market value of the shares at grant other than in the case of the grant of non-tax favoured options where the price may be the market price as at an award date which is prior to the date of the grant of the options unless otherwise specified by the Remuneration Committee.

The options will normally vest and become exercisable three years after grant. Options will lapse on the tenth anniversary of their grant date.

Authorities to allot and issue New Ordinary Shares

In order to enable the Company to proceed with the Placing the Directors are seeking express authorities to allot and issue shares and to dis-apply the statutory rights of pre-emption in relation to securities issued for cash. In addition they are also seek general authorities to reflect the Enlarged Share Capital following the issue of the Placing Shares.

Resolution 1 in the notice of the GM which is the Authorising Resolution, in addition to effecting the Consolidation, would give the Directors the authority to allot New Ordinary Shares (or grant rights to subscribe for or convert any securities into New Ordinary Shares) and to dis-apply the statutory right of the Shareholders in respect of the issue of new shares for cash up to an aggregate nominal amount equal to £50.68 million (representing 50,675,838 New Ordinary Shares) which is for the purposes of the Placing and the issue of the Warrants.

Resolution 2 in the notice of the GM would, conditional upon Admission, give the Directors the authority to allot New Ordinary Shares (or grant rights to subscribe for or convert any securities into New Ordinary Shares) in respect of the issue of new shares for cash up to an aggregate nominal amount equal to £22.14 million (representing 22,140,700 New Ordinary Shares). This amount is intended to give the usual ongoing authority to the Board to allot and issue shares by reference to the Enlarged Share Capital and will represent approximately 33 per cent of Enlarged Share Capital. If Admission does not take place the existing authority will remain in place until the next Annual General Meeting.

Resolution 3 in the notice of the GM would, conditional upon Admission taking place, give the directors the authority to allot New Ordinary Shares for cash without first offering them to existing shareholders in proportion to their existing shareholdings. This authority would be limited to allotments or sales in connection with rights issues or other pre-emptive offers, or otherwise up to an aggregate maximum nominal amount of £13.28 million (representing 13,284,420 New Ordinary Shares). This amount is intended to give the usual ongoing authority to the Board to dis-apply the statutory rights of pre-emption by reference to the Enlarged Share Capital and will represent approximately 20 per cent of Enlarged Share Capital. If Admission does not take place the existing authority will remain in place until the next Annual General Meeting.

General Meeting

The GM will take place at the Lingfield Suite, Hilton Hotel, South Terminal, Gatwick Airport, Gatwick RH6 0LL at 9.00 a.m. on 20 April 2015.

Form of Proxy

A Form of Proxy for use at the meeting is enclosed. Please complete and sign the Form of Proxy and return it to the Registrars so as to arrive no later than 48 hours (excluding non-working days) before the time fixed for the meeting.

The return of the Form of Proxy will not, however, prevent you from attending the meeting and voting, in person, should you wish to do so.


The Directors believe that the passing of all resolutions to be proposed at the GM will be in the best interests of the Company and the Shareholders as a whole and are unanimous in recommending that Shareholders vote in favour of them, as those Directors who are also Shareholders intend to do in respect of their own beneficial holdings of Existing Ordinary Shares having irrevocably undertaken to do so in respect of 34,425,000 Existing Ordinary Shares (representing 0.5 per cent of the Existing Ordinary Shares).


In this announcement, the following expressions shall have the following meanings, unless the context otherwise requires:


the admission to trading on AIM of the Placing Shares which is

expected to take place on 22 April 2015;


the AIM market operated by the London Stock Exchange;

AIM Rules

the rules for AIM companies as issued by the London Stock

Exchange, from time to time;

Authorising Resolution

resolution number 1 set out in the notice of the GM;

Board or Directors

the board of directors of the Company as at the date of this


Company or fastjet

fastjet Plc, a public limited company incorporated in England and

Wales with registered number 05701801;


the consolidation of the Existing Ordinary Shares into New Ordinary

Shares on the basis of 1 New Ordinary Share for each 100 Existing Ordinary Share held on the Record Date;

Enlarged Share Capital

the entire issued ordinary share capital of the Company following


Existing Ordinary Shares

the 1,642,209,696 Ordinary Shares of 1 pence each in issue on the

date of this announcement;

fastjet Group or Group

fastjet and its subsidiaries and, where the context requires, operating companies operating under the fastjet brand in which fastjet holds a substantial economic interest;

Form of Proxy

the form of proxy for use by holders of Existing Ordinary Shares accompanying the GM Notice;


the general meeting of the Company to be held at 9.00 a.m. on

20 April 2015, or any adjournment thereof;

Joint Bookrunners

Liberum and WHI;


Liberum Capital Limited, joint brokers to the Placing;

London Stock Exchange

the London Stock Exchange PLC;

New Ordinary Shares

ordinary shares of £1 each in the capital of the Company following

the Consolidation;


the conditional placing of the Placing Shares at the Placing Price

announced by the Company on 1 April 2015;

Placing Agreement

the conditional agreement entered into between the Company,

Liberum, WH Ireland and Sanlam and in respect of the Placing dated

1 April 2015;

Placing Price

£1.00 per Placing Share;

Placing Shares

the 50,000,000 New Ordinary Shares conditionally place pursuant to the terms of the Placing Agreement;

Record Date

20 April 2015;


Sanlam Securities UK Limited, joint brokers to the Placing;


the holders of Existing Ordinary Shares;


the lawful currency of the United States of America;


675,838 warrants to subscribe for New Ordinary Shares to be

issued to Liberum and Sanlam and 279,275 warrants (as adjusted by the Consolidation) to subscribe for New Ordinary Shares originally issued to WHI on 7 May 2014; and

WH Ireland

WH Ireland Limited, nominated adviser and joint brokers to the



Placing Statistics

Placing Price following Consolidation


Number of Existing Ordinary Shares at the date of this announcement


Number of issued New Ordinary Shares following the Consolidation but before the issue of the Placing Shares


Number of Placing Shares


Enlarged Ordinary Share Capital following completion of the Placing


Percentage of the Enlarged Ordinary Share Capital represented by the Placing Shares


Gross proceeds of the Placing

£50 million

Estimated net cash proceeds of the Placing

£47.7 million


Expected timetable of principal of events



Posting of this circular and the Form of Proxy

2 April

Latest time and date for receipt of Forms of Proxy from Shareholders

9.00 a.m. on 18 April

General Meeting of the Company

9.00 a.m. on 20 April

Record Date

5.00p.m. on 20 April

Admission effective and dealings in the New Ordinary Shares expected to commence on AIM and crediting of the New OrdinaryShares in uncertificated form to CREST stock accounts

21 April

Admission effective and dealings in the Placing Shares expected to commence on AIM and crediting of the Placing Shares in uncertificated form to CREST stock accounts

22 April

Expected date of dispatch of share certificates  in respect of the New Ordinary Shares

4 May

Expected date of dispatch of share certificates in respect of the Placing Shares

5 May


For more information, contact:

WH Ireland Limited (NOMAD)

James Joyce
Mark Leonard

Tel: +44 (0) 207 220  1666

Liberum Capital Limited (Broker)

Clayton Bush

Christopher Britton

Tel: +44 (0)203 100 2222

UK media - Citigate Dewe Rogerson

Angharad Couch

Toby Moore

Nick Hayns

Tel: +44 (0) 20 7638 9571

South African media - Tribeca Public Relation

Cian Mac Eochaidh

Kelly Webster

Tel: +27 (0) 11 208 5500


Posted on 2nd April 2015