FASTJET BUYS OUT BRAND RIGHTS FROM STELIOS
(Posted 30th June 2017)
Fastjet is today providing an update on trading for the period from 01st of January 2017 to date, ahead of its Annual General Meeting to be held later today.
The Company has made progress in implementing stabilisation efforts, including inter alia, a re-fleeting process, relocation of its headquarters from London to Johannesburg and a right-sizing of its operations in Zimbabwe and Tanzania. These steps are having the desired effect and accordingly fastjet aims to achieve a cashflow break-even position for the final quarter of 2017. The Company, aiming to leverage its relationship with Solenta Aviation Holdings, a strategic investor who acquired a shareholding in Fastjet in January 2017 and who has an operational footprint in a number of African countries, is in the process of evaluating expansion options to further geographies and looks forward to making further announcements in due course.
The Company also announced that it has, on 29th of June, entered into an agreement with easyGroup Holdings Ltd to acquire all intellectual property rights associated with the fastjet brand for a total consideration of $2.5 million, to be satisfied in cash, resulting in saving to the Company over the next 5 years. This agreement represents a major step forward as the Company continues with its stabilisation efforts under new management.
Stelios Haji-Ioannou, who established the fastjet brand in 2012 and founded easyJet in 1995, stated: ‘Fastjet is a great brand in all its African markets, making it a highly valuable asset for the company. I have accepted the view of the current board that the company should own its own brand rather than licence it from me. I feel we have agreed a fair price for its transfer – $2.5m – which is less than what the company would have had to pay over the next five years. I still hold shares worth about £1.3m in the company and as such I will be a supportive shareholder, hoping to realise significant upside potential as fastjet grows and prospers. From the decisive actions thus far taken by the new Management and Board, and early indicative outcomes, I am encouraged that Fastjet’s direction of travel is now on the right course‘.
Nico Bezuidenhout, CEO of Fastjet, appointed in the second half of 2016, responded by saying: ‘Brand development is an integral part of building a successful consumer facing business and represents a substantial investment for any airline – it logically follows that your brand, an asset to be leveraged for the benefit of Shareholders, should be under your full control and ownership. We are happy to have reached agreement with Sir Stelios and appreciate the ongoing confidence he has expressed in the fastjet business and leadership team‘.
Fastjet, at the airshow held in Paris last week, was awarded the prestigious Skytrax award as Best Low Cost Carrier in Africa.