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Budget airline Fastjet shares dive on profit warning | Budget airline Fastjet shares dive on profit warning |
(35 minutes later) | |
Shares in Fastjet have dropped 30% after the African budget airline issued a profit warning. | |
The airline, which is backed by Easyjet founder Sir Stelios Haji-Ioannou, said results in 2016 would be "materially below market expectations" amid a "challenging" African market. | |
Fastjet shares dropped 34% to 44.50p in early trading in London. | |
Last month, Stelios Haji-Ioannou said he had "lost faith" in the board and that the firm was running out of money. | |
Sir Stelios called for the dismissal of chief executive Ed Winter and another Fastjet director. | Sir Stelios called for the dismissal of chief executive Ed Winter and another Fastjet director. |
"Unless the board does some serious cost cutting the company will soon run out of cash," Sir Stelios warned in a letter to Fastjet's chairman. | "Unless the board does some serious cost cutting the company will soon run out of cash," Sir Stelios warned in a letter to Fastjet's chairman. |
In a trading update, Fastjet said it had over $20m (£14.1m) to meet current requirements, but the board may consider raising more funds later this year. | In a trading update, Fastjet said it had over $20m (£14.1m) to meet current requirements, but the board may consider raising more funds later this year. |
The company also no longer expects to generate positive cash flow for the year. | The company also no longer expects to generate positive cash flow for the year. |
Sir Stelios' investment company Easygroup has an 11% stake in Fastjet, according to the airline. | Sir Stelios' investment company Easygroup has an 11% stake in Fastjet, according to the airline. |
The entrepreneur and his family still own a significant stake in Easyjet and other companies including Easygym and Easypizza. |