FastJet eyes new local investors in Dar share sale

Money Markets

FastJet Tanzania is expected to benefit from entry into new markets and have greater access to more international African destinations. PHOTO | FILE 

By JOHN GACHIRI

In Summary

• Increase in local ownership will give it the national identity it needs and place it in a better position to negotiate new routes.

FastJet, a pan-African low-cost carrier, is planning to increase the number of Tanzanian shareholders that it said are meant to give it a national outlook in order to make it easier for the airline to access new routes.

FastJet said that it had appointed Enterprise Growth Market Advisors Ltd, a nominated adviser, to sell more shares in FastJet Tanzania, its local subsidiary in which it has a 49 per cent stake.

The remaining 51 per cent is owned by a group of Tanzanian investors and it is this stake that will be sold to a wider pool of local investors.

Increase in local ownership will give it the national identity it needs and place it in a better position to negotiate new routes.

“As a consequence of these changes FastJet Tanzania is expected to benefit from entry into new markets and have greater access to more international African destinations through the various Bilateral Air Service Agreements (BASAs) to which Tanzania is a party,” said FastJet in a statement.

FastJet did not, however, say whether the stake will be sold through a private placement or listing by introduction on the Dar-es-Salaam Stock Exchange.

An airline report by SBG securities says that the BASAs are the biggest hurdles for airlines that want to expand as the agreements are influenced more by national politics and not market demands.