fastjet: Proposed Placing and Open Offer

The Issue Price of 50 pence represents a significant premium of approximately 116 per cent to the closing price of each existing ordinary share of fastjet of 23.13 pence on 20 July 2016 (being the last practicable date prior to publication of this Announcement). The Issue Price has been set at a premium to the current share price so as to enable a number of the existing shareholders to satisfy their internal ownership limits. These shareholders, representing over 50% of the share register, have indicated they are supportive of the proposed Placing which will provide the Company with sufficient funds to execute its new business plan.

The Placing which is being conducted by way of an accelerated book-building process to qualifying investors will be launched immediately following this Announcement, in accordance with the terms and conditions set out in the Appendix to this Announcement.

Participants in the Placing and Open Offer will, if the Capital Raising becomes unconditional, also be issued with warrants ("Warrants") on the basis of one Warrant to subscribe for one new ordinary share in the Company for every new ordinary share subscribed under the Capital Raising. The Warrants will have an exercise price of 31.5 pence per share (based on a share weighted average of the 23.13 pence closing price on 20 July and the Issue Price) and an exercise period from the date of issue until 31 July 2021. The Warrants will be exercisable immediately from the date of issue but will not be initially listed or admitted to trading. However, the Company intends to seek a listing and admission to trading of the Warrants on an appropriate exchange as soon as practicable.

Liberum Capital Limited ("Liberum") is acting as sole bookrunner ("Bookrunner") on the Placing. The Placing and Open Offer are not being underwritten.

The Placing and Open Offer are each conditional upon, inter alia, the approval by shareholders in a General Meeting of the Company ("General Meeting") and admission of the ordinary shares placed pursuant to the Capital Raising to trading on AIM ("Admission").

The Company will shortly be publishing a circular (the "Circular") in connection with the Capital Raising and will be convening a General Meeting to approve certain matters necessary to implement the Capital Raising (the "Authorising Resolutions").

This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.

Expected timetable of principal events

Event	2016
Record Date for entitlement under the Open Offer	6.00 p.m. on 20 July
Ex-Entitlement Date	22 July
Posting of shareholder circular, the Form of Proxy and, to Qualifying non-CREST shareholders only, the Application Forms	22 July
Latest time and date for receipt of Forms of Proxy from Shareholders	10:00 a.m. on 4 August
Latest time and date for receipt of completed Application Forms and payment in full under the Open Offer	11:00 a.m. on 5 August
General Meeting of the Company	10:00 a.m. on 8 August
Admission and commencement of dealings in the new ordinary shares	9 August

The times and dates set out in the table above and mentioned throughout this announcement are indicative only and may be adjusted by the Company (in consultation with Liberum).

Background to the Capital Raising

2015 was a challenging year for fastjet, in which the Company encountered difficult macroeconomic conditions in its markets, delays in obtaining flying rights into Kenya, and new international routes performing below expectations, as well as various changes to executive management and the Board. These challenges contributed to the disappointing financial results and poor cash flow, which were set out in the Annual Report and Accounts 2015.

2015 was also a year of network and fleet growth for fastjet, having raised US$75m by way of an equity fundraising. The fleet grew from three to six aircraft in 2015, including the acquisition of the Group's first owned aircraft. A second airline and base were launched in Zimbabwe in 2015 and the two airlines currently operate 13 routes to 11 destinations in six countries in Africa.

Since the launch of fastjet Tanzania in 2012, fastjet has carried over 2 million passengers. In 2015, over 775,000 passengers were carried, a 30 per cent. increase on the prior year.

In December 2015, fastjet announced it had been granted approval by the Kenyan government to operate flights between Kenya and Tanzania. Flights between Dar es Salaam and Nairobi were launched in January 2016. However, ticket sales on this route have been lower than anticipated as fastjet experienced delays in setting up distribution channels and competitors reduced their fares.

The trading environment in which the Company operates remains challenging. Although the yield per passenger continues to improve from its low point in October 2015, passenger numbers remain lower than expected. We are pleased to report that domestic routes within Tanzania are showing signs of recovery, however, international services remain challenging.

Passenger numbers for the half year ended 30 June 2016 were approximately 390,000 (2015: 363,726) but load factors have declined to 47 per cent. (2015: 70 per cent.) due to the increase in available capacity from the enlarged fleet in the past 12 months. Although the ongoing cost reduction programme and the recent reduction in routes and fleet size are yielding material benefits, the Group continues to be cash flow negative and, as previously announced, expects to report a trading loss for 2016.

Strategy

Following a review of the Company's financial performance in 2015 and scrutiny of its operations, the Board's revised business plan which includes input from the new CEO, Nico Bezuidenhout, initially prioritises the initiatives required to stabilise the business in the short term. These include continuing with the cost reduction programme and ensuring careful management of the Company's current cash resources, rationalising routes to match capacity with demand and paring back expansion, with no new routes expected to launch for the remainder of 2016. A more flexible approach to the traditional low cost carrier model will also be employed. Better alignment of the Company's infrastructure and fleet to its stage of development and ensuring overheads are appropriate for the size of fastjet's operations is essential, in the Board's opinion, to achieving the desired improvement in cost management.

There are a number of revenue generating initiatives currently underway. In June 2016 the Company introduced a new mobile payment platform which offers a faster and more convenient means of payment for customers as well as lower transaction costs for fastjet compared with the previous platform. The new system provides improved tracking and data analysis and broadens the geographical scope of fastjet's mobile money facilities, expecting to reach fastjet customers in more countries and with an estimated 30% reduction in transactions costs.

A new consolidated call centre opened in South Africa in June 2016 offering multi-lingual services and covering Tanzania, Kenya, Uganda, Zambia, Zimbabwe and South Africa markets. The call centre is expected to improve sales conversions and improve the quality of service provided to customers located in those important African markets.

The planned introduction of a Global Distribution System (GDS) in September 2016 is expected to increase sales through improved accessibility to travel agents and compatibility with other airlines' schedules and ticketing as well as facilitating new and existing interline agreements. The new GDS will offer travel agents greater visibility of fastjet's routes and schedules and agents will be able to access fastjet seats at better prices compared with the current structure.

Strengthening the Board and its composition is another priority for the Group. As announced on 9 June 2016 Nico Bezuidenhout will be joining the Group on 1 August 2016 as its Chief Executive Officer. Mr Bezuidenhout joins fastjet from Mango Airlines, the low-cost carrier subsidiary of South African Airways, where he has been CEO since Mango commenced operations ten years ago. During his tenure, Mr Bezuidenhout grew the airline's market share to 25 per cent of the South African domestic air travel market and the fleet to ten Boeing 737-800 aircraft. He also achieved the lowest unit cost within the South African aviation industry through high aircraft utilisation and sustained good load factors.

The Board believes that Mr Bezuidenhout will bring strong commercial and strategic skills and a wealth of experience of operating a low-cost carrier in Africa. This experience, together with his detailed knowledge of the markets in which fastjet operates, will be invaluable to the Company as it seeks to stabilise the business and capture the growth opportunities in the region.

Although he has yet to join the Company, the Board and Mr Bezuidenhout have already identified a number of opportunities to stabilise the business and address many of the challenges the Company faces. These include a fundamental review of the fleet, both the size and type of aircraft operated, the routes flown, revenue generation initiatives and the relocation of the Head Office to Africa.

Mr Bezuidenhout will be based in Africa and will oversee the relocation of support functions and management closer to its operations and market. The Company intends to further strengthen the Board with additional Non-Executive Directors in due course.

Upon joining the Company in August 2016 Mr Bezuidenhout will initiate a review of the business. It is envisaged that existing cost cutting programme will be complete by Q4 2016 when the second phase will be initiated. Further to the review, the Company expects further route rationalisation in Q4 2016 when it expects to announce the decision on its fleet. The decision on the head office relocation and its implementation are also expected to commence in Q4 2016. With new revenue initiatives due to commence in Q4 2016, the Company is targetting a cash-flow break even position by the end of 2017.

With stability established, the Company's medium to long term strategy remains to realise its vision of becoming a pan-African low-cost carrier.

Future Prospects

Although the ongoing cost reduction programme and the recent reduction in routes and fleet size are yielding material benefits the Group continues to be cash flow negative. Accordingly the funds raised from this proposed Placing will provide the Group with essential working capital and importantly the resources to effect the necessary changes to our operations and fleet, to reduce costs further and pursue revenue generating initiatives. In addition, funds received from the Open Offer will allow the Board additional flexibility as they execute their new business plan.

With funding in place, the Board will implement its revised business plan and expects to see future growth as markets improve.

The Board believes that with a new CEO, 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.

Use of proceeds

The Company will use the proceeds of the Capital Raising (after expenses) as follows:

• For working capital purposes, allowing the Company to stabilise the business and introduce new revenue generating initiatives; and

• To implement the Company's revised business plan which is likely to include the introduction of new aircraft type to the fleet and the relocation of the Company's UK head office to Africa.

In addition to the Capital Raising, the Company is intending to sell its owned Airbus A319 in the course of the next 6-12 months. There can be no certainty that a sale on commercially acceptable terms will be achievable but should a sale be completed, the net proceeds of the sale will augment the use of proceeds set out above.

Working capital

The Directors believe that following receipt of the proceeds of the Placing, the Company will have sufficient working capital to finance its operations for at least the next 12 months.

Details of the Placing, Open Offer and Warrants to Subscribe

Details of the Placing

The Placing is being conducted by way of an Accelerated Book-Build led by Liberum as Sole Bookrunner.

Based on the Issue Price, the proceeds of the Placing net of expenses will be approximately £14.3 million. Liberum will receive its professional fees pursuant to the Placing in the form of new ordinary shares in the Company at the Issue Price.

Details of the number of new ordinary shares conditionally placed with institutional and other investors pursuant to the Placing ("Placing Shares") and gross proceeds will be announced as soon as practicable after the close of the book-building process.

The books for the Accelerated Book-Build will open with immediate effect. The books are expected to close no later than 3.00 pm (London) today. The timing of the closing of the books and the making of allocations may be accelerated or delayed at the Bookrunner's sole discretion. The Appendix to this Announcement contains the detailed terms and conditions of the Accelerated Book-Build. The Placing is not being underwritten by Liberum or any other person.

Qualifying investors who are invited, and who choose, to participate in the Accelerated Book-Build by making an oral and legally binding offer to acquire Placing Shares, will be deemed to have read and understood this Announcement in its entirety, including the Appendix, and to be making such offer on the terms and subject to the conditions contained herein and to be making the representations, warranties, undertakings and acknowledgements contained in the Appendix to this Announcement.

The Placing Shares will be issued credited as fully paid and will rank pari passu with existing ordinary shares of the Company ("Existing Ordinary Shares"), including the right to receive all dividends and other distributions (if any) declared, made or paid on or in respect of such shares after the date of their issue.

The Company has entered into a placing agreement (the "Placing Agreement") with the Bookrunner on customary terms and conditions pursuant to which the Bookrunner has conditionally agreed, as agents for the Company, to use its reasonable endeavours to procure Placees for the Placing Shares at the Issue Price.

Your attention is drawn to the detailed terms and conditions of the Placing described in the Appendix to this announcement (which forms part of this announcement) (together, the "Announcement").

Details of the Open Offer

Subject to the fulfilment of certain conditions, Qualifying Shareholders are being given the opportunity to subscribe for new ordinary shares pursuant to the Open Offer ("Open Offer Shares") at a price of 50 pence per Open Offer Share, pro rata to their holdings of Existing Ordinary Shares on the Record Date on the basis of:

1 Open Offer Share for every 8 Existing Ordinary Shares

Open Offer Entitlements will be rounded down to the nearest whole number of Open Offer Shares.

Qualifying Shareholders are also being given the opportunity, provided that they take up their Open Offer Entitlement in full, to apply for Excess Shares through the Excess Application Facility.

The Open Offer Shares will be allotted and issued following and conditional on, inter alia, the passing of the Authorising Resolutions at the General Meeting.

Assuming full take-up under the Open Offer, the issue of the Open Offer Shares will raise further gross proceeds of approximately £4.2 million for the Company.

The Open Offer Shares will, upon issue, rank pari passu with the Placing Shares and the Existing Ordinary Shares.

Qualifying Shareholders with holdings of Existing Ordinary Shares in both certificated and uncertificated form will be treated as having separate holdings for the purpose of calculating the Open Offer Entitlements.

It should be noted that the Open Offer is not a rights issue. Accordingly, the Application Form is not a document of title and cannot be traded. Any Open Offer Shares not applied for under the Open Offer will not be sold in the market or placed for the benefit of Qualifying Shareholders who do not take up their rights to subscribe under the Open Offer.

Excess Application Facility

The Excess Application Facility will enable Qualifying Shareholders, provided that they take up their Open Offer Entitlement in full, to apply for Excess Open Offer Entitlements.

Qualifying non-CREST Shareholders who wish to apply to acquire more than their Open Offer Entitlement should complete the relevant sections on the Application Form. Qualifying CREST Shareholders will have Excess CREST Open Offer Entitlements credited to their stock account in CREST and should refer to paragraph 4 of Part III of the Circular for information on how to apply for Excess Shares pursuant to the Excess Application Facility. Open Offer Shares will be available to satisfy Excess Open Offer Entitlements only and to the extent that applications by other Qualifying Shareholders are not made or are made for less than their Open Offer Entitlements. Once subscriptions by Qualifying Shareholders under their respective Open Offer Entitlements have been satisfied, the Company shall, in its absolute discretion, determine whether to meet any excess applications in full or in part and no assurance can be given that applications by Qualifying Shareholders under the Excess Application Facility will be met in full, in part or at all.

Application will be made for the Open Offer Entitlements and Excess Open Offer Entitlements in respect of Qualifying CREST Shareholders to be admitted to CREST. It is expected that such Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST at 8.00 a.m. on 25 July 2016. Such Open Offer Entitlements and Excess Open Offer Entitlements will also be enabled for settlement in CREST at 8.00 a.m. on 25 July 2016. Applications through the means of the CREST system may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

Qualifying non-CREST Shareholders will receive an Application Form with the Circular which sets out their entitlement to Open Offer Shares as shown by the number of Open Offer Entitlements allocated to them. Qualifying non-CREST Shareholders should note that the Application Form is not a negotiable document and cannot be traded.

Qualifying CREST Shareholders will receive a credit to their appropriate stock accounts in CREST in respect of their Open Offer Entitlements as soon as possible after 8.00 a.m. on 9 August 2016. Qualifying CREST Shareholders should note that although the Open Offer Entitlements and Excess Open Offer Entitlements will be admitted to CREST and be enabled for settlement, applications in respect of entitlements under the Open Offer may only be made by the Qualifying Shareholder originally entitled or by a person entitled by virtue of a bona fide market claim.

If applications are made for less than all of the Open Offer Shares available, then the lower number of Open Offer Shares will be issued and any outstanding Open Offer Entitlements will lapse.

Further information on the Open Offer and the terms and conditions on which it is made, including the procedure for application and payment, are set out in Part III of the Circular.

For Qualifying non-CREST Shareholders, completed Application Forms, accompanied by full payment, should be returned by post or by hand (during normal business hours only) to Neville Registrars Limited at Neville House, 18 Laurel Lane, Halesowen, West Midlands, B63 3DA so as to arrive as soon as possible and in any event so as to be received no later than 11.00 a.m. on 5 August 2016. For Qualifying CREST Shareholders the relevant CREST instructions must have been settled as explained in the Circular by no later than 11.00 a.m. on 5 August 2016.

Warrants to Subscribe

The Warrants to subscribe will be issued to Placees under the terms of the Placing and to Open Offer subscribers under the terms of the Open Offer on the basis of one Warrant to subscribe for one new ordinary share in the Company for every new ordinary share subscribed under the Capital Raising. The Warrants will have an exercise price of 31.5 pence per share and an exercise period from the date of issue until 31 July 2021 and if not exercised prior to that date shall lapse.

Conditions and other information relating to the Capital Raising.

The Placing, the Open Offer and the issue of the Warrants to Subscribe are conditional, inter alia, upon:

1. the passing of the Authorising Resolutions (without amendment);

1. the Placing Agreement becoming unconditional in all respects and not having been terminated in accordance with its terms; and

1. Admission becoming effective by no later than 8.00 a.m. on 9 August 2016 (or such later time and/or date as the Company and Liberum may agree (being not later than 8.00 a.m. on 31 August 2016).

Accordingly, if such conditions are not satisfied, or, if applicable, waived, the respective part or parts of the Capital Raising will not proceed. If the Placing does not proceed, the Company will not have sufficient working capital to finance its operations for the next 12 months.

If the Open Offer does not proceed any applications made by Qualifying Shareholders will be rejected and application monies will be returned without payment of interest as soon as practicable.

Related Party Transactions

M&G Investment Management Ltd, by virtue of its holding of more than 10 per cent. of the existing issued share capital of the Company, is considered a related party of the Company and its participation in the Placing is considered a 'related party transaction' under the AIM Rules for Companies. The Directors consider having consulted the Company's Nominated Adviser, Liberum, that the terms of the Placing are fair and reasonable in so far as its Shareholders are concerned.

Application for Admission to trading on AIM

Application will be made to the London Stock Exchange for the New Ordinary Shares to be admitted to trading on AIM. It is expected that Admission will become effective and that dealings for normal settlement in the New Ordinary Shares on AIM will commence at 8.00 a.m. on 9 August 2016.

Proposed Reorganisation

As at the close of business on 20 July 2016 the price of the Existing Ordinary shares was 23.13 pence which is below their nominal value of £1 per share. The issue of new shares by a UK company at a price below their nominal value is prohibited by UK company law and accordingly it is not possible to effect the Capital Raising without reorganising the Existing Ordinary Shares.

Accordingly the Directors are seeking Shareholders' authority to implement the reorganise the Existing Ordinary Shares so that the nominal value of the Company's ordinary shares is changed to 1p to enable the Placing and Open Offer Shares to be issued at the Issue Price.

In order to effect the Reorganisation each Existing Ordinary Share of £1 each be subdivided and converted into one New Ordinary Share of 1p and 11 B Deferred Shares of 9p each.

As a consequence of the Reorganisation each Shareholder's holding of New Ordinary Shares will immediately following the Reorganisation becoming effective be exactly the same as the number of Existing Ordinary Shares held by them on the Record Date.

The New Ordinary Shares will continue to carry the same rights as attached to the Existing Ordinary Shares. The last day of trading on AIM in the Existing Ordinary Shares is expected to be 8 August 2016.

If the Reorganisation is approved, the New Ordinary Shares will be admitted to trading on AIM with no change to the existing ISIN: GB00BWGCH354.

As the number of New Ordinary Shares held be each holder will remain the same following the Reorganisation, no new share certificates will be issued, and existing certificate(s) will remain valid for the quantity shown.

Shareholders who hold their entitlement to Existing Ordinary Shares in uncertificated form through CREST should expect the CREST description of the stock adjusted to reflect their nominal value on 9 August 2016.

Following the Reorganisation Existing Shareholders will hold, in addition to each New Ordinary Share which they hold, 11 B Deferred Shares of 9p each. The B Deferred Shares will be effectively valueless as they will not carry any rights to vote or dividend rights. In addition, holders of B Deferred Shares will only be entitled to a payment on a return of capital or on a winding up of the Company after each of the holders of Ordinary Shares have received a payment of £10,000,000 on each such share. The B Deferred Shares will not be listed or traded on AIM and will not be transferable without the prior written consent of the Board. No share certificates will be issued in respect of the B Deferred Shares, nor will CREST accounts of shareholders be credited in respect of any entitlement to B Deferred Shares.