African budget operator Fastjet Group has negotiated a $600,000 loan and is holding discussions to obtain creditor discounts to reduce its liabilities.
The loan – initially for a six-month term – has been obtained from shareholder Solenta Aviation Holdings to provide working capital and liquidity while Fastjet’s operations are suspended by coronavirus lockdowns in South Africa and Zimbabwe.
Solenta is securing the loan against a South African-registered Fastjet Embraer ERJ-145.
Fastjet Group has been holding talks with creditors and several have agreed to repayment deferrals or creditor discounts.
It says such discounts have reduced its liabilities by $600,000 to date, and its management has identified additional discounts of $1-3 million.
“Such [additional discounts] would relieve significant pressure on the company’s current balance sheet obligations in the future,” it adds.
Fastjet Group had $1.9 million in cash reserves at 22 April. It believes it will have sufficient resources to meet operational needs until the end of July, but warns that the headroom of cash “remains minimal” and there is still uncertainty as to whether it will be able to continue trading past that date.
