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Author Baffler     View Profile     Add to favourites     Ignore
Date posted 2017-06-30 18:48
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Sir Stelios Haji-Ioannou, the founder of African airline Fastjet, has made an ‘easy’ $2.5m (£1.92m) after selling the company’s name to it.
The high-profile easyJet founder had been earning a fee from the Johannesburg-based airline by licensing out the name but said the “fair price” he and the company’s board had agreed was below what it would have paid to use the brand over the next five years.
Sir Stelios said he would still hold shares worth about £1.3m in the £55m market cap company and would remain a "supportive shareholder" willing to wait for the "significant upside potential" of the business
Any moves to save costs will be welcomed by investors who have suffered years of share price losses. The stock has dropped 99.6pc since August 2012, but rose 15pc after news of the deal with Sir Stelios to hover around 19p.
2017 has been a busy year for the company so far after it raised $28m from investors in January by placing 143m shares at the same time as signing up new shareholder Solenta to help stabilise the business.
Solenta, a specialist aviation group, provided Fastjet with three leased aircraft in return for a 28pc shareholding, making it the airline’s largest stakeholder.
Management said today its efforts to rein in its overenthusiastic - and ultimately unsuccessful - expansion in Zimbabwe and Tanzania had started to pay off, predicting cash flow would be flat in the final quarter of 2017. It declined to give more detail on current trading in its update.
Fastjet, which is listed on Aim, suffered a shareholder uprising last year after reporting a £25m loss in 2015. Its co-founder, easyJet tycoon Sir Stelios Haji-Ioannou, successfully launched a rebellion to remove boss Ed Winter early last year, while chairman Colin Child announced he was leaving in November, little more than a year after taking the post, when he also admitted the carrier needed more cash.
In its full-year results for 2016, the company said losses before tax soared from $21.6m (£16.8m) to $47.9m as costs increased by 29pc.
In spite of its recent troubles, the company was awarded the Skytrax award as Best Low Cost Carrier in Africa at an airshow held in Paris last week.

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