African budget airline Fastjet saved from imminent closure with $10m injection

Fastjet saved from imminent closure with Sh22bn injection

Troubled African budget airline Fastjet has been saved from imminent collapse with a Sh22 billion ($10 million) cash injection from its shareholders.

However the airline, which already halted operations in Kenya, said the cash injection will only give it enough funds to keep going for the rest of this year.

Half the funds will be used to support Zimbabwe and Mozambique operations and to repay some loans while the rest will go to trading in Tanzania.

Fastjet admitted that it was on the brink of collapse on Wednesday and acknowledged it would go bust unless it secured a rescue deal.

The company also released its 2017 results on Friday in which it said that revenue for 2017 fell to $46.2 million from US $ 68.5 million the previous year, while pretax losses fell to $24.5 million from $67.7 million in 2016.

The company says the reduced loss was due to a significant drop in administrative costs. However airline expert AJ Bell said the emergency cash injection “should not obscure the fact that this is a business in serious trouble”.

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