Fastjet rejigs shares to prevent a drop below nominal 1p value

 
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AFRICAN airline Fastjet is planning to consolidate its shares in order to keep on the right side of UK company law and try to stabilise its share price.

Fastjet’s shares, which had fallen from 4p at the start of the year to 1.16p yesterday, will be subject to a one-for-ten consolidation and then split into ordinary shares, worth a nominal 1p each, and deferred B-shares, worth 9p.

The B-shares will be effectively valueless, holding no voting or dividend rights.

Company law dictates that shares cannot change hands for less than their nominal value – a rule that Fastjet is at risk of breaking if its shares in their current form continue to fall in price.

The firm added that the restructuring will help it raise more money by issuing equity “in the near future”, as well as curbing the large percentage swings seen in the share price in recent months.

Investors will vote on the share proposals on 20 August.

Fastjet is working to shake up the loss-making parts of its Fly 540 unit, and said yesterday that an announcement will be made once the plans are finalised.

The company, which is backed by EasyJet founder Sir Stelios Haji-Ioannou, posted a $55m loss for its first 18 months in operation in June.