fastjet Plc (Incorporated in England and Wales with registered number )

Transcription

1 THIS CIRCULAR AND THE ACCOMPANYING APPLICATION FORM ARE IMPORTANT AND REQUIRE YOUR IMMEDIATE ATTENTION. If you are in any doubt about the contents of this circular and/or as to the action you should take, you should immediately consult your stockbroker, bank manager, solicitor, accountant, or other independent financial adviser duly authorised under the Financial Services and Markets Act 2000 (as amended) if you are in the United Kingdom or, if not, another appropriately authorised independent financial adviser. If you sell or have sold or otherwise transferred all of your Existing Ordinary Shares before the date that the Existing Ordinary Shares are marked ex-entitlement to the Open Offer by the London Stock Exchange, please immediately forward this circular, together with the accompanying Application Form, to the purchaser or transferee, or to the stockbroker, bank or other agent through whom the sale or transfer was effected, for delivery to the purchaser or transferee. If you sell or have sold or otherwise transferred only part of your holding of Existing Ordinary Shares you should retain this circular and the accompanying Application Form and should immediately contact your stockbroker, bank or other agent through whom the sale or transfer was effected. This circular and the accompanying Application Form should not be sent or transmitted in or into any jurisdiction where to do so might constitute a violation of local securities law or regulations including, but not limited to, any Restricted Jurisdiction. The total consideration under the Open Offer shall be less than 5 million (or an equivalent amount) in aggregate. Therefore, in accordance with Section 85 and Schedule 11A of FSMA, this circular is not, and is not required to be, a prospectus for the purposes of the Prospectus Rules and has not been prepared in accordance with the Prospectus Rules. Accordingly, this circular has not been, and will not be, reviewed or approved by the Financial Conduct Authority of the United Kingdom, pursuant to sections 85 and 87 of FSMA, the London Stock Exchange, any securities commission or any other authority or regulatory body. In addition, this circular does not constitute an admission document drawn up in accordance with the AIM Rules for Companies. fastjet Plc (Incorporated in England and Wales with registered number ) Placing of 66,495,310 New Ordinary Shares at a price of 8 pence per share Subscription for 28,924,538 New Ordinary Shares by Solenta Aviation Holdings Limited at a price of 8 pence per share Open Offer of up to 20,092,623 New Ordinary Shares at a price of 8 pence per share This circular should be read as a whole. Your attention is drawn in particular to the letter from the Chairman of the Company which is set out in Part I of this circular. The latest time and date for acceptance and payment in full under the Open Offer is a.m. on 26 July The procedure for acceptance and payment is set out in Part III of this circular and, where relevant, in the Application Form. Liberum, which is authorised by the FCA, is acting exclusively for the Company and no-one else in connection with the Capital Raising and will not regard any other person (whether or not a recipient of this circular) as a client in relation to the Capital Raising and will not be responsible to anyone other than the Company for providing the protections afforded to its clients or for providing advice in relation to the Capital Raising or any other matter referred to herein. Its responsibilities as the Company s nominated adviser and broker under the AIM Rules for Companies and the AIM Rules for Nominated Advisers are owed to the London Stock Exchange and the Company and not to any other person in respect of his decision to acquire New Ordinary Shares in reliance on any part of this circular. Liberum has not authorised the contents of, or any part of, this circular and no liability whatsoever is accepted by Liberum nor does it make any representation or warranty, express or implied, for the accuracy of any information or opinion contained in this circular or for the omission of any information. Liberum expressly disclaims all and any responsibility or liability whether arising in tort, contract or otherwise which it might otherwise have in respect of this circular. The Existing Ordinary Shares are admitted to trading on AIM, a market operated by the London Stock Exchange. AIM is a market designed primarily for emerging or smaller companies to which a higher investment risk tends to be attached than to larger or more established companies. AIM securities are not admitted to the Official List of the UK Listing Authority. A prospective investor should be aware of the risks of investing in such companies and should make the decision to invest only after careful consideration and, if appropriate, consultation with an independent financial adviser. Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Placing Admission will become effective and that dealings in the Placing Shares and the Solenta Subscription Shares to be issued pursuant to the Placing and the Solenta Subscription will commence at 8.00 a.m. on 5 July It is expected that Open Offer Admission will become effective and that dealings in the Open Offer Shares to be issued pursuant to the Open Offer will commence at 8.00 a.m. on 30 July 2018.

2 This circular does not constitute a prospectus or a prospectus equivalent document. This circular cannot be relied on for any investment contract or decision. No person has been authorised to give any information or make any representation and, if given or made, such information or representation must not be relied upon as having been so authorised by the Company, the Directors or Liberum. In particular, the content of the Company s website does not form part of this circular and Shareholders and prospective shareholders should not rely on it. Qualifying non-crest Shareholders will find an Application Form accompanying this circular. Qualifying CREST Shareholders (none of whom will receive an Application Form) will receive a credit to their stock accounts in CREST in respect of the Open Offer Entitlements which will be enabled for settlement at 8.00 a.m. on 5 July Applications under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim arising out of a sale or transfer of Existing Ordinary Shares prior to the date on which the Existing Ordinary Shares were marked ex-entitlement. If the Open Offer Entitlements are for any reason not enabled by 5 July 2018 (or such later time as the Company may decide), an Application Form will be sent to each Qualifying CREST Shareholder in substitution for the Open Offer Entitlements credited to its stock account in CREST. Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST Sponsors regarding the action to be taken in connection with this circular and the Open Offer. Applications for Excess Shares pursuant to the Excess Application Facility may be made by the Qualifying Shareholder provided that their Open Offer Entitlement has been taken up in full and subject to being scaled back in accordance with the provisions of this circular. Holdings of Existing Ordinary Shares in certificated and uncertificated form will be treated as separate holdings for the purpose of calculating entitlements under the Open Offer. Copies of this circular are available free of charge from the Company s registered office or to download from the website of fastjet Plc, Notice to Overseas Shareholders None of this circular and/or the accompanying documents should be distributed, forwarded, or transmitted in, or into, any jurisdiction where to do so might constitute a violation of local securities laws or regulations, including but not limited to the Restricted Jurisdictions. In addition, the transfer of Open Offer Entitlements or Excess Open Offer Entitlements through CREST, in jurisdictions other than the UK, including the Restricted Jurisdictions, may be restricted by law and therefore persons into whose possession this circular comes should inform themselves about and observe any of those restrictions. Any failure to comply with any of those restrictions may constitute a violation of the securities laws of any such jurisdiction. This circular does not constitute, and may not be used for the purposes of, any offer or invitation to sell or issue or the solicitation of any offer to purchase or subscribe for Open Offer Shares to or by anyone in any jurisdiction in which such offer, invitation or solicitation is unlawful or to any person to whom it is unlawful to make such offer or invitation or undertake such solicitation. This circular and the Application Form do not constitute an offer of the Open Offer Shares to any person with a registered address, or who is resident or located, in any of the Restricted Jurisdictions. This circular and the Application Form are not being sent to Shareholders with registered addresses in the Restricted Jurisdictions. None of the Open Offer Shares, the Open Offer Entitlements or the Excess Open Offer Entitlements has been or will be registered under the US Securities Act or under the applicable state securities laws of the United States or under the applicable securities laws of Australia, Canada, Japan, New Zealand, Russia or the Republic of South Africa. Subject to certain exceptions, the Open Offer Shares, the Open Offer Entitlements and the Excess Open Offer Entitlements may not be offered, sold, taken up, delivered or transferred in or into the any of the Restricted Jurisdictions. In particular, none of the Open Offer Shares, the Open Offer Entitlements or the Excess Open Offer Entitlements may be, directly or indirectly, offered, sold, taken up, delivered, renounced or transferred in or into the United States, except pursuant to an applicable exemption from, or in a transaction not subject to, the registration requirements of the US Securities Act and in compliance with any applicable securities laws of any state or other jurisdiction of the United States. There will be no public offering of any of the Open Offer Shares, the Open Offer Entitlements or the Excess Open Offer Entitlements in the United States. Neither the SEC nor any state securities commission or other US regulatory authority has approved or disapproved of the Open Offer Shares, the Open Offer Entitlements or the Excess Open Offer Entitlements or endorsed the merits of the Capital Raising or the adequacy or accuracy of this circular. Any representation to the contrary is a criminal offence in the United States. In addition, Application Forms are not being posted to and no Open Offer Entitlements or the Excess Open Offer Entitlements will be credited to a stock account of any person in any of the Restricted Jurisdictions. The attention of Overseas Shareholders and other recipients of this circular who are residents or citizens of any country other than the United Kingdom is drawn to the section entitled Overseas Shareholders at section 7 of Part III of this circular. This circular and the Open Offer Shares may not be redistributed or forwarded directly or indirectly into any Restricted Jurisdiction. 2

3 TABLE OF CONTENTS Page Capital Raising Statistics 4 Expected Timetable of Principal Events 5 Definitions 6 Part I Letter from the Chairman 10 Part II Risk Factors 17 Part III Terms and Conditions of the Open Offer 31 3

4 CAPITAL RAISING STATISTICS Issue Price ISIN (Ordinary Shares) ISIN (Basic entitlements) ISIN (Excess entitlements) 8 pence GB00BWGCH354 GB00BFWFZC41 GB00BFWFZH95 Number of Existing Ordinary Shares in issue on the Record Date 522,408,205 Number of New Ordinary Shares to be issued pursuant to: the Placing 66,495,310 the Solenta Subscription 28,924,538 the Open Offer (1) 20,092,623 Basis of the Open Offer 1 New Ordinary Share for every 26 Existing Ordinary Shares held by Qualifying Shareholders Enlarged Ordinary Share Capital following completion of the Placing, 637,920,676 the Solenta Subscription and Open Offer (1) Percentage of the Enlarged Ordinary Share Capital represented by the New Ordinary Shares (1) Gross proceeds of the Placing Gross proceeds of the Solenta Subscription Gross proceeds of the Open Offer (1) Cash proceeds after expenses of the Placing, the Solenta Subscription and the Open Offer (1) 18.1 per cent. 5.3 million 2.3 million 1.6 million 8.8 million Notes: (1) Assuming take-up in full of the Open Offer. 4

5 EXPECTED TIMETABLE OF PRINCIPAL EVENTS Record Date for entitlement under the Open Offer Ex-Entitlement Date Posting of this circular and, to Qualifying non-crest shareholders only, the Application Forms Placing Admission effective and dealings in the Placing Shares and the Solenta Subscription Shares expected to commence on AIM Open Offer Entitlements and Excess CREST Open Offer Entitlements credited to stock accounts in CREST of Qualifying CREST Shareholders Latest recommended time and date for requesting withdrawal of Open Offer Entitlements and Excess CREST Open Offer Entitlements from CREST Latest time for depositing Open Offer Entitlements and Excess CREST Open Offer Entitlements into CREST Latest time and date for splitting Application Forms (to satisfy bona fide market claims) Latest time and date for receipt of completed Application Forms and payment in full from Qualifying Shareholders under the Open Offer or settlement of relevant CREST instruction (as appropriate) Open Offer Admission effective and dealings in the Open Offer Shares expected to commence on AIM Expected date for crediting of the Open Offer Shares in uncertificated form to CREST stock accounts Expected date of dispatch of share certificates in respect of the Open Offer Shares p.m. on 3 July 4 July 4 July 8.00 a.m. on 5 July 5 July 4.30 p.m. on 20 July 3.00 p.m. on 23 July 3.00 p.m. on 24 July a.m. on 26 July 8.00 a.m. on 30 July 30 July 6 August If you have any questions on the procedure for acceptance and payment, you should contact Neville Registrars Limited at Neville House, Steelpark Road, Halesowen B62 8HD, or by telephone on Calls are charged at the standard geographic rate and will vary by provider. Calls outside the United Kingdom will be charged at the applicable international rate. The helpline is open between 9.00 a.m. and 5.00 p.m., Monday to Friday excluding public holidays in England and Wales. Please note that Neville Registrars cannot provide any financial, legal or tax advice and calls may be recorded and monitored for security and training purposes. Please note that Neville Registrars cannot provide financial advice on the merits of the Capital Raising or as to whether or not you should take up your entitlement. The dates set out in the Expected Timetable of Principal Events above and mentioned throughout this circular may be adjusted by fastjet in which event details of the new dates will be notified via an RIS and, where appropriate, to Shareholders. All references to time are to the time in London, England. 5

6 DEFINITIONS 2006 Act the UK Companies Act 2006 AIM Rules for Companies the AIM rules for Companies, as published and amended from time to time by the London Stock Exchange AIM Rules for Nominated Advisers the rules for nominated advisers to AIM companies, as published and amended from time to time by the London Stock Exchange Applicant Application Form Articles Business Day Capital Raising Company or fastjet CREST CREST member CREST participant CREST payment CREST Regulations CREST Sponsor CREST sponsored member Enlarged Share Capital Euroclear UK & Ireland Excess Application Facility a Qualifying Shareholder or a person entitled by virtue of a bona fide market claim who lodges an Application Form under the Open Offer the application form which accompanies this circular on which Qualifying non-crest Shareholders may apply for Open Offer Shares under the Open Offer the existing articles of association of the Company as at the date of this circular any day (other than a Saturday or Sunday) upon which commercial banks are open for business in London, UK the Placing, the Solenta Subscription and the Open Offer, taken together fastjet Plc the relevant system for the paperless settlement of trades and the holding of uncertified securities operated by Euroclear UK and Ireland in accordance with the CREST Regulations a person who has been admitted by Euroclear UK and Ireland as a system-member (as defined in the CREST Regulations) a person who is, in relation to CREST, a system participant (as defined in the CREST Regulations) shall have the meaning given in the CREST manual issued by Euroclear UK and Ireland the Uncertificated Securities Regulations 2001, as amended a CREST participant admitted to CREST as a CREST sponsor a CREST member admitted to CREST as a sponsored member (which includes all CREST Personal Members) the issued ordinary share capital of the Company immediately following Open Offer Admission Euroclear UK & Ireland Limited, the operator of CREST the arrangement pursuant to which Qualifying Shareholders may apply for Open Offer Shares in excess of their Open Offer Entitlements 6

7 Excess CREST Open Offer Entitlement Excess Open Offer Entitlement Excess Shares Existing Ordinary Shares FCA FSMA Group HMRC ISIN Issue Price Liberum London Stock Exchange Member Account ID Money Laundering Regulations New Ordinary Shares Official List Open Offer Open Offer Admission Open Offer Entitlement Open Offer Shares in respect of each Qualifying CREST Shareholder, the entitlement to apply for Open Offer Shares in addition to his Open Offer Entitlement credited to his stock account in CREST, pursuant to the Excess Application Facility which is conditional on him taking up his Open Offer Entitlement in full and which may be subject to scaling back in accordance with the provisions of this circular an entitlement for each Qualifying Shareholder to apply to subscribe for Open Offer Shares in addition to his Open Offer Entitlement pursuant to the Excess Application Facility which is conditional on him taking up his Open Offer Entitlement in full and which may be subject to scaling back in accordance with the provisions of this circular New Ordinary Shares in addition to the Open Offer Entitlement for which Qualifying Shareholders may apply under the Excess Application Facility the existing Ordinary Shares the Financial Conduct Authority of the United Kingdom the Financial Services and Markets Act 2000 (as amended) the Company, together with its subsidiary undertakings HM Revenue & Customs International Securities Identification Number 8 pence per New Ordinary Share Liberum Capital Limited, nominated adviser and sole broker to the Company London Stock Exchange plc the identification code or number attached to any member account in CREST the Money Laundering Regulations 2017 (as amended) the Placing Shares, the Solenta Subscription Shares and the Open Offer Shares the daily official list maintained by the FCA the invitation to Qualifying Shareholders to apply to subscribe for New Ordinary Shares at the Issue Price on the terms and subject to the conditions set out in Part III of this circular and, where relevant, in the Application Form the admission to trading on AIM of the Open Offer Shares, which is expected to take place on 30 July 2018 the entitlement for Shareholders to subscribe for 1 Open Offer Share for every 26 Existing Ordinary Shares held as at the Record Date and allocated to Qualifying Shareholders pursuant to the Open Offer the 20,092,623 new Ordinary Shares subject to the Open Offer 7

8 Open Offer Subscribers Ordinary Shares Overseas Shareholder Participant ID Placing Placing Admission Placing Shares Prospectus Rules Qualifying CREST Shareholders Qualifying non-crest Shareholders Qualifying Shareholders Shareholders who subscribe for Open Offer Shares the ordinary shares in the capital of the company being of 1p nominal value a Shareholder who is resident, or who is a citizen of, or who has a registered address in a jurisdiction outside the United Kingdom the Identification code or membership number used in CREST to identify a particular CREST member or other CREST participant the placing of the Placing Shares at the Issue Price by Liberum as described in this circular the admission to trading on AIM of the Placing Shares and the Solenta Subscription Shares, which is expected to take place on 5 July 2018 the 66,495,310 new Ordinary Shares which have been placed firm with institutional and other investors by Liberum pursuant to the Placing the rules made by the FCA under Part VI of FSMA in relation to transferable securities to the public and admission of transferable securities to trading on a regulated market Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company at the close of business on the Record Date were held in uncertificated form Qualifying Shareholders whose Existing Ordinary Shares on the register of members of the Company at the close of business on the Record Date were held in certificated form holders of Existing Ordinary Shares on the register of members of the Company at the Record Date (but excluding any Overseas Shareholders who are resident in, or who are citizens of, or who have a registered address in a Restricted Jurisdiction) Record Date 6.00 p.m. on 3 July 2018 Receiving Agents or Registrars Restricted Jurisdiction SEC Shareholder Solenta Solenta Subscription Solenta Subscription Letter Neville Registrars Limited at Neville House, Steelpark Road, Halesowen B62 8HD each and any of the United States of America, Australia, Canada, Japan, New Zealand, Russia, and the Republic of South Africa and any other jurisdiction where extension or availability of the Open Offer would breach any applicable law or regulations the US Securities Exchange Commission a holder of Ordinary Shares Solenta Aviation Holdings Limited the subscription by Solenta for the Solenta Subscription Shares as the Issue Price the subscription letter from Solenta to the Company dated June 2018 in connection with the Solenta Subscription 8

9 Solenta Subscription Shares sterling, pounds sterling,, pence or p Stock account UK Listing Authority US Person US Securities Act US$, USD or $ the 28,924,538 new Ordinary Shares which have been subscribed for by Solenta pursuant to the Solenta Subscription Letter the lawful currency of the United Kingdom an account within a member account in CREST to which a holding of a particular share or other security in CREST is credited the FCA acting in its capacity as the component authority for the purposes of Part VI of FSMA a US person as defined in Regulation S promulgated under the US Securities Act the United States Securities Act of 1993 (as amended) the lawful currency of the United States of America 9

10 PART I LETTER FROM THE CHAIRMAN fastjet Plc (Incorporated and registered in England and Wales under the Companies Act 1985 with registered number ) Registered office: 6th Floor, 60 Gracechurch Street, London EC3V 0HR Directors Rashid Wally, Non-Executive Chairman Nico Bezuidenhout, Chief Executive Officer Michael Muller, Chief Financial Officer Robert Burnham, Non-Executive Director Peter Hyde, Non-Executive Director Mark Hurst, Non-Executive Director Dear Shareholder, 4 July 2018 The Placing, Solenta Subscription and Open Offer 1. Introduction On 29 June 2018, the Company announced that it had raised 5.3million (approximately US$7million) (before expenses) by way of a placing with institutional and other shareholders of 28,924,538 Placing Shares at 8 pence per Placing Share and a further 2.3million (approximately US$3million) (before expenses) by way of the subscription by Solenta for 28,924,538 Solenta Subscription Shares at 8 pence per Solenta Subscription Share. In addition to the Placing and the Solenta Subscription, the Company has announced that up to a maximum of 1.6million (approximately US$2.1million) would be raised by way of an Open Offer made to Qualifying Shareholders of up to 20,092,623 Open Offer Shares. The Open Offer is being conducted on the basis of 1 Open Offer Share for every 26 Existing Ordinary Shares held as at the Record Date of 3 July As part of the Open Offer, the Excess Application Facility will allow excess applications for new Ordinary Shares over and above Qualifying Shareholders Open Offer Entitlements to be accepted from such holders to the extent that other Qualifying Shareholders do not take up their full Open Offer Entitlement. Applications under the Open Offer and the Excess Application Facility need to be received by Neville Registrars by a.m. on 26 July The New Ordinary Shares to be issued pursuant to the Placing and the Solenta Subscription are to be admitted to trading on AIM, which is expected to take place at 8.00 a.m. on 5 July The New Ordinary Shares to be issued pursuant to the Open Offer are to be admitted to trading on AIM, which is expected to take place at 8.00 a.m. on 30 July The purpose of this letter is to explain to Shareholders the background to, and reasons for, the Capital Raising. 10

11 2. Background to the Capital Raising 2017 was a year of stabilisation for fastjet as the Company continued the implementation of its Stabilisation Plan, which commenced in August During 2017, the Company carried out key initiatives including network rationalisation and right-sizing of capacity to fastjet s target markets, withdrawing from loss-making routes, fleet reconfiguration and a significant reduction in the underlying cost base. The Group successfully launched operations in Mozambique through its Brand Licence Agreement with Solenta Aviation Mozambique Ltd (SAM) in the second half of the year and it entered into a similar licence agreement with Federal Airlines (Pty) Ltd (FedAir), creating a platform for expansion into South Africa. The purchase of the fastjet brand from easygroup was another important milestone for the Company in 2017, enabling scope for future licence agreements and greater operational flexibility, particularly in terms of the type of aircraft that fastjet operates. The Company also implemented additional revenue generating initiatives including a new Central Reservation System and improved travel agent distribution capability. A key component of the Stabilisation Plan is to ensure that fastjet operates the appropriate size of fleet in each of its markets, in terms of both number and size of aircraft. The Company returned its last A319 aircraft in January 2018 and now operates two Embraer E190 aircraft in Tanzania, two Embraer E145 aircraft between South Africa and Zimbabwe and an Embraer E145 in Mozambique. The introduction of three ATR72 aircraft, announced on 29 September 2017, will be deployed in key markets during September The Group holds two Air Operator Certificates (AOCs) in Tanzania and Zimbabwe with the FedAir and SAM Brand Licence Agreements enabling the fastjet brand to now have access to both the South Africa and Mozambique markets. The Group s financial statements for the year ended 31 December 2017 were published on 29 June 2018 and are available on fastjet s website. Fundraisings In January 2017, fastjet embarked on a fundraising exercise to finance the Stabilisation Plan, which raised net proceeds of US$26.5million. At the same time, the Company also entered a strategic partnership with Solenta, a South Africa based operator of one of the largest African aircraft fleets. Under this agreement, Solenta provides and operates aircraft on a reduced cash cost, wet/dry-lease basis for fastjet and supplies other aviation services. It is an exciting and positive strategic partnership for fastjet as this agreement allows the Company to leverage Solenta s existing African business whilst simultaneously providing the platform to grow and scale fastjet flexibly and cost effectively. In September 2017, fastjet announced a further funding exercise, raising net proceeds of US$42million to support its growth initiatives, allowing it to enter the Mozambique and South African markets and to purchase an option right on the three ATR72 aircraft noted above. Although the Company has made significant progress in delivering its growth strategy, it also experienced a number of unexpected headwinds in the period. During the last quarter of 2017, the Company experienced an unexpected engine event with the outgoing A319 aircraft shortly before its scheduled withdrawal from service, leading to unplanned exceptional cash costs of US$4million. In addition, the revenues lost as a result of this engine event were approximately US$2.9million. In addition to the above, the Group incurred a US$2.5million bad debt write down in the period in relation to historic trade receivables, representing further pressure on working capital. Moreover, the entry of the two Embraer E190 aircraft in Tanzania was delayed by approximately six weeks due to a longer than anticipated regulatory approval process, resulting in a negative impact of approximately US$5million to the Group s revenues. Whilst the trading performance in Zimbabwe is improving, hard-currency availability and fastjet s ability to repatriate funds from the country remains challenged, further contributing to a shortage of working capital across the Group. To help manage the working capital shortfall resulting from the unforeseen events in 2017, the Company entered into a US$12million loan facility with Solenta in April 2018, to fund the exercise of the Company s option over the three ATRs with the balance to be used for general working capital purposes. The Company also entered into unsecured loan agreements with third parties, Annunaki Investments (Private) Limited (Annunaki) and SSCG Africa Holdings (SSCG) in June 2018, in order to make available a portion of the Group s restricted cash held within Zimbabwe. The loans are on commercial terms, for a period of six months, and allow fastjet to lend US$5million cash from fastjet Zimbabwe to Annunaki in return for a 11

12 US$2million loan to fastjet from SSCG for general working capital purposes across the Group. The intention is that each loan is repaid at the end of the six months unless the term is extended by mutual agreement by all of the parties. At 18 June 2018, the Group s cash balance was US$3.3million reflecting the purchase of equity in the three ATR72 aircraft referred to above, further operating cash outflows and a creditor reduction. Following the loan swap agreement announced on 5 June 2018, cash balances of US$1.75million held in Zimbabwe are currently restricted due to lack of foreign exchange liquidity in the country. Based on the Group s latest cashflow forecasts, June 2018 is expected to be the most challenging month in terms of financial headroom for the Group during the 2018 financial year. The Placing and Solenta Subscription announced on 29 June 2018 is expected to provide adequate headroom for the remainder of the financial year. Further details of the Placing and Solenta Subscription can be found in the announcement available on the fastjet website. 3. Future Prospects As previously announced, the Company intends to expand its operations to address new markets. Firstly the Group intends to expand services in Mozambique and Zimbabwe followed by the launch of scheduled services in South Africa in early 2019, subject to obtaining suitable additional fleet and the associated finance. South Africa is strategically important to fastjet given the relative size of the South African aviation market (c.13 million domestic passengers per annum) as well as the existence of strong trade and tourism flows with the existing fastjet markets of Zimbabwe, Mozambique and Tanzania. fastjet s management relations and track record in South Africa, in addition to the FedAir platform, support an expedient launch at the appropriate time. The Company s current intention is to explore financing and/or joint venture options to support full-scale market entry. 4. Use of Proceeds The net proceeds of the Capital Raising will be used as follows: l l 50 per cent. to support the working capital requirements of the Zimbabwe and Mozambique operations and the repayment of the loan swap agreements with Annunaki and SSCG; and 50 per cent. to support the working capital requirements of the Tanzania operations and for preparations for the launch of services in South Africa. 5. Details of the Placing, Solenta Subscription and Open Offer 5.1 Details of the Placing Liberum has raised 5.3million (US$7million) (before expenses) for the Company by way of a placing of 28,924,538 Placing Shares at 8 pence per Placing Share with institutional and other shareholders. The Placing is not being underwritten by Liberum or any other person. The Placing is conditional on, inter alia, Placing Admission. 5.2 Details of the Solenta Subscription Pursuant to the Solenta Subscription Letter, Solenta has applied to subscribe for 28,924,538 Solenta Subscription Shares at the Issue Price for an aggregate subscription price of 2.3 million (US$3million). The Solenta Subscription is conditional on Placing Admission. In addition to Solenta, as fastjet s largest shareholder, supporting the Capital Raising, Mark Hurst, currently CEO of Solenta, joined the board of fastjet with effect from 2 July Mr Hurst has been appointed as a Non-Executive Director and will be working closely with the Group s CEO, Nico Bezuidenhout, on an ongoing basis. Mr Hurst will also be responsible for the country management of the Group s Zimbabwe and Mozambique operations. Going forward, the Company will manage its treasury requirements in line with this revised operational structure with all current and future assets, cash and liabilities of the Group s Zimbabwe and Mozambique operations remaining within these entities, including, once repaid the recently announced loan swap of US$5 million made to Annunaki. 12

13 As well as the Solenta Subscription Letter, the Company also entered into a Memorandum of Understanding with Solenta on 29 June 2018 (the Memorandum) pursuant to which the Company has agreed to: l l l procure that the Group s South African subsidiary, Parrot Aviation Pty Ltd (Parrot), will prior to Placing Admission, exercise its call option to conditionally acquire FedAir at an agreed consideration of ZAR44.4 million; prior to Placing Admission, procure that FedAir will make an interest free loan to Solenta of ZAR44.4 million; on completion of the conditions precedent relating to the acquisition of FedAir pursuant to the call option, Solenta will repay the ZAR44.4 million loan to FedAir and FedAir will (following Placing Admission) repay the existing loan balance from Parrot to FedAir of ZAR37.4 million to be used by Parrot towards settling the purchase price mentioned above, with a further loan of ZAR7.0 million extended by FedAir to a Group company of the Company s choosing; and l fastjet has agreed to waive the licence fee under the FedAir Brand Licence Agreement until the later of (i) 1 July 2019 (or such later date as Solenta and the Company may agree) or (ii) the date on which the fastjet brand is used by FedAir to sell tickets on scheduled services as an airline. In addition to the above conditions, the Memorandum sets out the organisational changes involving the reorganisation of the Group s operations, the appointment of Mark Hurst as a director of the Company and the allocation of the proceeds of the Capital Raising as set out above. 5.3 Principal terms of the Open Offer Subject to the fulfilment of the conditions set out below and in Part III of this circular, Qualifying Shareholders are being given the opportunity to subscribe for the Open Offer Shares at a price of 8 pence per Open Offer Share pro rata to their holdings of Existing Ordinary Shares on the Record Date on the basis of: 1 Open Offer Share for every 26 Existing Ordinary Shares Open Offer Entitlements will be rounded down to the nearest whole number of Open Offer Shares. Qualifying Shareholders are also being given the opportunity, provided that they take up their Open Offer Entitlement in full, to apply for Excess Shares through the Excess Application Facility. Assuming full take-up under the Open Offer, the issue of the Open Offer Shares will raise further gross proceeds of approximately 1.6 million (US$2.1 million) for the Company. If any of the Open Offer Shares are not taken up, the Company and Liberum will consider placing any shortfall with institutional and other investors at the Issue Price. The Open Offer Shares will, upon issue, rank pari passu with the Placing Shares, the Solenta Subscription Shares and the Existing Ordinary Shares. Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating the Open Offer Entitlements. It should be noted that the Open Offer is not a rights issue. Accordingly, the Application Form is not a document of title and cannot be traded. Any Open Offer Shares not applied for under the Open Offer will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not take up their rights to subscribe under the Open Offer. 5.4 Excess Application Facility The Excess Application Facility will enable Qualifying Shareholders, provided that they take up their Open Offer Entitlement in full, to apply for Excess Open Offer Entitlements. 13

14 Qualifying non-crest Shareholders who wish to apply to acquire more than their Open Offer Entitlement should complete the relevant sections on the Application Form. Qualifying CREST Shareholders will have Excess CREST Open Offer Entitlements credited to their stock account in CREST and should refer to paragraph 4 of Part III of this circular for information on how to apply for Excess Shares pursuant to the Excess Application Facility. Open Offer Shares will be available to satisfy Excess Open Offer Entitlements only and to the extent that applications by other Qualifying Shareholders are not made or are made for less than their Open Offer Entitlements. Once subscriptions by Qualifying Shareholders under their respective Open Offer Entitlements have been satisfied, the Company shall, in its absolute discretion, determine whether to meet any excess applications in full or in part and no assurance can be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full, in part or at all. Application will be made for the Open Offer Entitlements and Excess Open Offer Entitlements in respect of Qualifying CREST Shareholders to be admitted to CREST. It is expected that such Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST at 8.00 a.m. on 5 July Such Open Offer Entitlements and Excess Open Offer Entitlements will also be enabled for settlement in CREST at 8.00 a.m. on 5 July Applications through the means of the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim. Qualifying non-crest Shareholders will receive an Application Form with this circular which sets out their entitlement to Open Offer Shares as shown by the number of Open Offer Entitlements allocated to them. Qualifying non-crest Shareholders should note that the Application Form is not a negotiable document and cannot be traded. Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Open Offer Entitlements as soon as possible after 8.00 a.m. on 5 July Qualifying CREST Shareholders should note that although the Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim. If applications are made for less than all of the Open Offer Shares available, then the lower number of Open Offer Shares will be issued and any outstanding Open Offer Entitlements will lapse. Further information on the Open Offer and the terms and conditions on which it is made, including the procedure for application and payment, are set out in Part III of this circular. For Qualifying non-crest Shareholders, completed Application Forms, accompanied by full payment, should be returned by post or by hand (during normal business hours only) to Neville Registrars Limited at Neville House, Steelpark Road, Halesowen B62 8HD so as to arrive as soon as possible and in any event so as to be received no later than a.m. on 26 July For Qualifying CREST Shareholders the relevant CREST instructions must have been settled as explained in this circular by no later than a.m. on 26 July Conditions and other information relating to the Capital Raising The Open Offer is conditional, inter alia, upon Open Offer Admission becoming effective by no later than 8.00 a.m. on 30 July 2018 (or such later time and/or date as the Company and Liberum may agree (being not later than 8.00 a.m. on 13 August 2018). If the Open Offer does not proceed any applications made by Qualifying Shareholders will be rejected and application monies will be returned without payment of interest as soon as practicable. The Capital Raising will result in the issue of 115,512,471 New Ordinary Shares assuming full take up under the Open Offer (representing, in aggregate, approximately 18.1 per cent. of the Enlarged Share Capital assuming full take up under the Open Offer). The New Ordinary Shares, when issued and fully paid, will rank pari passu in all respects with the Existing Ordinary Shares and therefore rank equally for all dividends or other distributions declared, made or paid after the date of issue of the New Ordinary Shares. No temporary documents of title will be issued. 14

15 Following the issue of the New Ordinary Shares pursuant to the Capital Raising (and assuming that the Open Offer is taken up in full), Qualifying Shareholders who take up their full entitlements, excluding any New Ordinary Shares acquired through the Excess Application Facility, in respect of the Open Offer will undergo a dilution of up to 15.4 per cent. to their interests in the Company because of the Placing and the Solenta Subscription. Qualifying Shareholders who do not take up any of their entitlements in respect of the Open Offer will experience a greater dilution to their interests in the Company because of the Capital Raising. 6. Related Party Transactions Solenta, by virtue of its holding of more than 10 per cent. of the existing issued share capital of the Company, is considered a related party of the Company and its participation in the Solenta Subscription is considered a related party transaction under the AIM Rules for Companies. The Directors consider, having consulted with Liberum, that the terms of the Solenta Subscription are fair and reasonable in so far as the Shareholders are concerned. M&G Investment Management Ltd, by virtue of it holding more than 10 per cent. of the existing issued share capital of the Company, is considered a related party of the Company and its participation in the Placing is therefore a related party transaction under the AIM Rules for Companies. The Directors consider, having consulted with Liberum, that the terms of the Placing are fair and reasonable in so far as the Shareholders are concerned. 7. Application for Admission to trading on AIM Application has been made to the London Stock Exchange for the Placing Shares and the Solenta Subscription Shares to be admitted to trading on AIM. Application will be made to the London Stock Exchange for the Open Offer Shares to be admitted to trading on AIM. It is expected that Placing Admission for the Placing Shares and the Solenta Subscription Shares will become effective and that dealings for normal settlement in the Placing Shares and the Solenta Subscription Shares on AIM will commence at 8.00 a.m. on 5 July It is expected that Open Offer Admission will become effective and that dealings for normal settlement in the Open Offer Shares on AIM will commence at 8.00 a.m. on 30 July Action to be taken by Shareholders 8.1 Open Offer Qualifying non-crest Shareholders If you are a Qualifying non-crest Shareholder you will have received an Application Form which gives details of your maximum entitlement under the Open Offer (as shown by the number of Open Offer Entitlements allocated to you). If you wish to apply for Open Offer Shares under the Open Offer (whether in respect of your Open Offer Entitlement or both your Open Offer Entitlement and any Excess Open Offer Entitlements), you should complete the accompanying Application Form in accordance with the procedure for application set out in paragraph 4 of Part III of this circular and on the Application Form itself. Qualifying CREST Shareholders If you are a Qualifying CREST Shareholder and do not hold any Ordinary Shares in certificated form, no Application Form accompanies this circular and you will receive a credit to your appropriate stock account in CREST in respect of the Open Offer Entitlements representing your maximum entitlement under the Open Offer except (subject to certain exceptions) if you are an Overseas Shareholder who has a registered address in, or is a resident in or a citizen of a Restricted Jurisdiction. Applications by Qualifying CREST Shareholders for Excess Open Offer Entitlements in excess of their Open Offer Entitlements should be made in accordance with the procedures set out in section 4 of Part III of this circular, unless you are an Overseas Shareholder in which event, applications should be made in accordance with the procedures set out in section 7 of Part III of this circular. 15

16 The latest time for applications under the Open Offer to be received is a.m. on 26 July The procedure for application and payment depends on whether, at the time at which application and payment is made, you have an Application Form in respect of your entitlement under the Open Offer or have Open Offer Entitlements credited to your stock account in CREST in respect of such entitlement. The procedures for application and payment are set out in Part III of this circular. Qualifying CREST Shareholders who are CREST sponsored members should refer to their CREST Sponsors regarding the action to be taken in connection with this circular and the Open Offer. 9. Overseas Shareholders Information for Overseas Shareholders who have registered addresses outside the United Kingdom or who are citizens or residents of countries other than the United Kingdom appears in paragraph 7 of Part III of this circular, which sets out the restrictions applicable to such persons. If you are an Overseas Shareholder, it is important that you pay particular attention to that paragraph of this circular. Yours faithfully Rashid Wally Non-Executive Chairman 16

17 PART II RISK FACTORS An investment in the Open Offer Shares involves a high degree of risk. Accordingly, prospective investors should carefully consider the specific risk factors set out below in addition to the other information contained in this document before investing in the Open Offer Shares. The Directors consider the following risks and other factors to be the most significant currently facing the Company, but the risks listed do not purport to comprise all those risks associated with an investment in the Company and are not set out in any particular order of priority. Additional risks and uncertainties not currently known to the Directors may also have an adverse effect on the Company s business. If any of the following risks actually occur, the Company s business, financial condition, capital resources, results or future operations could be materially adversely affected. In this event, the price of the Ordinary Shares could decline and investors may lose all or part of their investment. The investment offered in this document may not be suitable for all of its recipients. Before making an investment decision, prospective investors should consult a person authorised under FSMA who specialises in advising on the acquisition of shares and other securities. A prospective investor should consider carefully whether an investment in the Company is suitable for him/her in the light of his/her personal circumstances and the financial resources available to him/her. Funding Working capital Should the Placing and Solenta Subscription not proceed the working capital available to the Company will be materially adversely affected and, as a further consequence, adversely affect the ability of the Company to continue to operate as a going concern. Expansion The Company s plans to expand its operations will require further funding as the proceeds of this Placing and Solenta Subscription and, if any, Open Offer will only be sufficient to fund the Company s current operations and not its growth strategy. If further equity funding is required, Shareholders will experience a dilution of their shareholding in the Company if they do not participate in any equity such fundraise to an extent that matches their existing proportionate shareholding. In addition, the Company s major shareholder has the ability to block any special resolutions that the Company may need to pass in order to enable it or its Directors to issue new Ordinary Shares as part of any such future fundraise. Risks relating to the Group s business General economic conditions in its key markets The Group s business is based in Africa and derives its revenues from operations in various countries on the continent. The political and economic environment in those countries can be unstable and exposes the Group to operational and financial risks. The business is reliant on continued improvement in the economies of those countries in which it currently invests and those countries into which it may expand in the future. The Group will only be able to fully achieve its objectives in the event that the economies of the countries in which it invests continue to improve and that there is no material adverse decline in those economies. Further details are set out in the section Risks relating to investing in Africa set out below. 17