Troubled airline Fastjet lands £7.6m lifeline to continue flying
TROUBLED African airline
Fastjet pulled out of its nosedive after being handed a £7.6m lifeline that will keep it flying until at least the end of the year.
The low-cost carrier admitted that it was on the brink of collapse on Wednesday and would go bust unless it secured a rescue deal, sending its shares spiralling 78pc in just one day.
Its largest shareholder, South African airline Solenta Aviation, stepped in to sink an extra £2.3m into the business, while an additional £5.3m was raised through a placing.
The airline has endured several years of bumpy trading, tapping investors four times to keep in the air since 2016. Easyjet owner and its founder Sir Stelios Haji-ioannou said he has become “increasingly concerned” by the way the airline has been run in the last few years, having already successfully launched a shareholder rebellion to oust boss Ed Winter.
The emergency cash call “should not obscure the fact that this is a business in serious trouble”, AJ Bell’s Russ Mould warned. Its shares ended a turbulent week back on the climb, up to 8.6p, a rise of 165pc.
Elsewhere, Talktalk was the FTSE 250’s biggest loser after plans to shore up its balance sheet were dealt a blow by Daisy Group ditching a deal for its business-to-business division. RBC Capital Markets speculated that the £175m deal could have been dumped after Daisy’s boss Neil Muller failed to find a buyer for the company and stepped down earlier this week. The collapse of the debt-slashing deal knocked Talktalk 2.7p to 105p, a three-month low. Defence giant BAE
Systems rallied 14.8p to 646.8p after bagging a £20bn contract to build frigates for the Australian navy. The deal shows “BAE and the UK Government working well together”, Jefferies argued, while Jpmorgan delivered the company an upgrade to “neutral”. BAE shares were also lifted by the FTSE 100 firm revealing that it expects its first payment for a Qatari order for 24 Typhoon jets in the third quarter of the year. Chemicals specialist
Elementis plunged 31p to 252.8p after launching a rights issue to fund a $600m deal for Mondo Minerals from Advent International.
A double downgrade to “underweight” from Morgan Stanley for FTSE 250 oilfield services company Hunting sent it sliding 39p to 776p. The bank argued that its recovery will face delays. Engineering giant Rollsroyce hit a three-year high on an upgrade to “buy” from Redburn, advancing 28.6p to 988.2p.
Stocks ended a turbulent first half of the year on the front foot, boosted by a rebound in Asian markets. The FTSE 100’s 21.30-point rise to 7,636.93 was capped by the pound surging on the first-quarter UK growth upgrade from the ONS.
Brent crude prices climbed a further 2.4pc to $79.70 per barrel, recording their biggest weekly gain in over two months. The move came amid fears that the US will urge its allies to cut off Iranian supply from November.