Fastjet’s share price drops as it announces plans to raise funds to turn around fortunes in tough market
African budget airline Fastjet has announced plans to raise funds to overhaul its operations amid a challenging environment.
The airline has said that its operating environment "remains challenging" as it continues to cope with lower than expected passenger numbers and negative cashflow.
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The Africa-focussed airline's share price plummeted over 13 per cent in mid-morning trading on the news.
Fastjet said it has started the initial phases of fundraising, which it hopes to complete in July.
The company said it "needs to raise further finance to provide essential working capital and also to effect the necessary changes to its operations, reduce costs further and pursue revenue generating initiatives to grow the business".
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"These include a fundamental review of our fleet, both the size and type of aircraft operated, the routes flown, the relocation of our head office to Africa and revenue generation initiatives."
The airline added of incoming chief executive Nico Bezuidenhout that it "believes that with a new chief executive, who has a proven track record of successfully operating a low cost carrier in Africa, combined with a more pragmatic approach to operating the business, a much reduced cost base and management positioned in proximity to our markets and customers the group has a viable and attractive future".