FASTJET PLC DIRECTORS RECOMMEND DELISTING OF SHARES FROM LSE
(Posted 28th July 2020)
Small scale investors in Fastjet PLC are likely to take a financial hit as the company’s directors have apparently recommended the delisting of ordinary shares from the London Stock Exchange.
The following notice was filed by the company as per regulatory requirements:
fastjet, the low-cost African airline, today announces that the Directors have concluded that it is in the best interests of the Company and its Shareholders to cancel the admission of the ordinary shares in the Company (the “Ordinary Shares”) to trading on AIM (the “Cancellation”). Pursuant to Rule 41 of the AIM Rules for Companies (the “AIM Rules”), the Company has notified the London Stock Exchange of the date of the proposed Cancellation.
The Cancellation is conditional, pursuant to Rule 41 of the AIM Rules, upon the approval of not less than 75 percent of the votes cast.
The Annual General Meeting of the company set for the 12th of August is also faced to decide on the following additional recommendations of the Board of Directors:
In addition, the Directors have further concluded that the Company will need to carry out a share reorganisation in order for it to be able to issue new Ordinary Shares in the future to enable the Company to raise additional funding for its ongoing operations and trading. The nominal value of the Ordinary Shares is currently £0.01 per share and the market value of the Ordinary Shares is below that nominal value (and has been consistently below the nominal value since late 2019). As a matter of English law, the Company is unable to issue new Ordinary Shares at an issue price which is below the nominal value of the Ordinary Shares. It is therefore proposed to sub-divide each existing Ordinary Share into one Ordinary Share of £0.0001 nominal value and one deferred share of £0.0099 nominal value (“Deferred Shares”) (the “Share Reorganisation”), thus enabling the Company lawfully to issue new Ordinary Shares.
The Share Reorganisation is conditional upon the approval of not less than 75 per cent of the votes cast by Shareholders at the General Meeting.
The Directors have also concluded that it is in the best interests of the Company and its Shareholders for the Company to re-register as a private company (the “Re-Registration”) and adopt new articles of association of the Company following the Cancellation (the “New Articles”). The Re-Registration is conditional upon the Cancellation becoming effective and the approval of not less than 75 per cent. of the votes cast by Shareholders at the General Meeting.
The Company is therefore seeking Shareholders’ approval of the Cancellation, the Share Reorganisation and the Re-Registration at the General Meeting which has been convened for 10.00 a.m. on 12 August 2020 at 60 Gracechurch Street, London EC3V 0HR.
Driving force behind the proposals is majority shareholder Solenta Aviation Holdings of South Africa, which is finally showing their cards in an open hand as to what their ultimate intentions for Fastjet PLC are, something which has in the past been long speculated over. Continued to regulatory notice:
Solenta Aviation Holdings Limited (“SAHL”) has indicated to the Company that it will only continue to provide the Company with financial support on condition that the Company’s listing on AIM is cancelled. Any such future financial support from SAHL is likely to take the form of either further additional secured convertible loans to the Company or a capital fundraise by the issue of new Ordinary Shares. Without this support, and the passing of the Resolutions to be proposed at the General Meeting in the form set out below in this announcement, the Board believes that it will be very difficult for the Company to continue trading into the foreseeable future as a going concern. In light of the above, the Directors believe that it is important for the Shareholders to pass the Resolutions.
The Company therefore announces its intention to seek Shareholders’ approval for the Cancellation. An explanatory circular will be posted to Shareholders today (the “Circular”) setting out the background to and reasons for the Cancellation, the reasons why the Directors believe that this is in the best interests of the Company and its Shareholders as a whole and their recommendation to Shareholders to vote in favour of the Resolutions.
Notably will shareholders be denied entry to the AGM under the cover of #COVID19 regulations, effectively relegating them to remote status of asking questions by email in advance:
Relevant questions from Shareholders related to the General Meeting can be raised by emailing GMQueries in advance of the General Meeting and, in so far as a question is relevant to the business of the meeting, the Company will endeavour to respond to such questions by email (or in another suitable manner) and taken into account as appropriate at the General Meeting itself;
The Notice went on to spell out Solenta’s position vis a vis continued support for the company as follows:
The Company has received an irrevocable undertaking from SAHL to vote or procure votes in favour of the Resolutions in respect of, in aggregate, 2,255,504,566 Ordinary Shares, representing approximately 59.3 per cent. of the entire issued share capital of the Company as at 23 July 2020, being the latest practicable date prior to publication of this announcement.
Furthermore, in the event that both of the Resolutions are not approved, SAHL has indicated that it will no longer be in a position to support the Company with further working capital, loans or participation in future share placements, and without this continued support, or other existing or new Shareholders agreeing to provide loans or support share placements, the longer term ability of the Company to continue trading as a going concern will be severely threatened.
Accordingly, given SAHL’s undertaking to vote in favour of the Resolutions, the Directors believe that it is likely that the Resolutions will be passed at the General Meeting and, therefore, enable the Company to continue trading as a going concern into the future for the benefit of all Shareholders.
It is expected that minority shareholders, bullied into submission, will accept the proposals made but only once the actual AGM and votes have taken place can this finally be ascertained.
As to Fastjet Zimbabwe, the following information could be extracted from the filed documents:
The Company continues to perform limited repatriation flights between Zimbabwe and South Africa but continues to suspend routine scheduled flight operations due to the continued country-wide lockdowns in South Africa and Zimbabwe due to COVID-19. COVID-19 infections in South Africa, the Company’s biggest market, are currently still increasing with the current peak forecasted for the end of August 2020 or early September 2020. Total infections are in excess of 400,000 people and South Africa has the fifth highest infection rate globally today;
The Board believes that international travel will likely only resume from mid October 2020 or November 2020 at the earliest, based on the significant recent increase in COVID-19 infections, predominately in South Africa;
As at 22 July 2020, the Company had cash reserves of US$1.6 million with no restricted cash. Of the Group’s US$1.6 million cash reserves, US$0.05 million is in Zimbabwe and currently unrestricted;
The Company has received US$400,000 equivalent against the Company’s historical legacy loans which was used to settle two overdue critical suppliers;
No further progress has been made with an investor consortium led and underwritten by SAHL and other local investors in Zimbabwe (the “Investor Consortium”), in relation to the disposal of the Company’s holding in fastjet Zimbabwe Limited (the “Disposal”). Discussions with the Investor Consortium were scheduled to restart once the impact and timeline of the COVID-19 related lockdowns in South Africa and Zimbabwe are better understood.
Watch this space for updates on the future of a company which set out to become a pan-African low cost airline.