fastjet signs an agreement that disposes its stake in Fly540 Ghana
fastjet is pleased to announce that it has signed an agreement to dispose of its interest held by the Company and fastjet Air Limited, a wholly owned subsidiary of fastjet, in airline Fly540 Ghana Limited (Fly540 Ghana), the loss-making investment it had previously acquired from Lonrho Aviation in July 2012. This is in line with the Company's previously announced strategy to exit from certain territories operated before the establishment of the fastjet brand in Tanzania and elsewhere.
fastjet CEO Ed Winter commented: "The disposal of Fly540 Ghana is a great step forward in fastjet's restructuring plans for our legacy businesses. Whilst West Africa remains of interest to us as a low-cost market in the future, our current focus is on expanding our footprint in Eastern and Southern Africa. fastjet has retained the right to discuss the introduction of the fastjet brand in West Africa when it considers the economic conditions and infrastructural environment to be more favourable."
Operations in Ghana were suspended in May 2014 and since that time the Company has been exploring opportunities to restructure or dispose of this loss-making business. Upon completion of this agreement (which was unconditional and simultaneous with signing) Fly540 Ghana was removed from the fastjet Group.
The Sellers held 800,000 ordinary shares of no par value in Fly540 Ghana, representing its entire issued share capital (the Shares). In the year ended 31 December 2014 Fly540 Ghana recorded losses before tax of US$11.3 million. On completion of the Agreement, the Sellers transferred the Shares to DWG-G Company Limited (the Purchaser) for a nominal consideration of US$1 in cash. The Sellers gave no representations or warranties in respect of the transfer of the Shares and all liabilities of Fly 540 Ghana transferred with it on completion of the Agreement.
As a result of the sale of the Sellers' interest in Fly540 Ghana, and the concurrent removal of the Company's control of that entity, Fly540 Ghana's financial results, assets and liabilities will no longer be consolidated into the fastjet Group's (the Group) financial statements. The Group's financial statements as at 31 December 2014 included net liabilities in Fly540 Ghana amounting to approximately US$6.9 million. The Group, through its subsidiary fastjet Aviation Limited (a non-operating holding company) has given a guarantee for an overdraft that remains part of Fly540 Ghana's liabilities, however there is no liability on the part of the Company in respect of the guarantee, nor in respect of any of Fly540 Ghana's liabilities at any time and therefore this sale of the Company's 100% shareholding in Fly540 Ghana will not have any cash impact on the Company or the Group.