More woes for Zimbabwe as Fastjet announces exit plans

Low cost airline Fastjet has announced plans to dispose of its Zimbabwean unit.

In a statement released on Wednesday, Fastjet said it is looking to offload the Zimbabwe unit to a consortium led by its major shareholder, Solenta Aviation, for US$8m (about R118m at current exchange rates).

Fastjet said if the restructuring plans do not pan out by the end of February, the Africa-focused company may not be able to continue trading as a going concern.

Persistent volatility and uncertainty in the Zimbabwean market would see the company report a loss after tax of around US$7m to US$8m (R103 – R118m at current exchange rates) for 2019, compared with a loss of US$65m (R960m) a year earlier.

“The group is, therefore, currently in active discussions with certain of its major shareholders to explore various options including raising equity capital and/or a restructuring of the company involving the disposal of Fastjet Zimbabwe,” it said.

“The disposal, if agreed, approved 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 business model,” its CEO Mark Hurst said