News and Views
Tanzania: Fastjet Plans to Go Public On Acquisition Agreement
LOW cost carrier FastJet is considering making public acquisition agreements it entered with Five Forty Aviation in order to clear the air on disputes between the two firms.
FastJet’s Commercial Manager, Jean Aku, maintained that the company had cleared all payments regarding the purchase of the Nairobi-based Lonrho Aviation which was part of Five Forty Aviation.
“We are ready to make public the sale agreement for the sake of clearing our image which has of late been tainted with false allegations.
It is true that we inherited some liabilities from the acquisition which we are paying off at the moment,” Ms Aku told a full-packed news conference in Dar es Salaam.
On its part, Five Forty Aviation through its Chief Executive Director Don Smith said in a statement issued to the media in Dar es Salaam yesterday that Fast- Jet did not meet conditions of the acquisition.
“As all the conditions of the acquisition were not met, FastJet did not gain a 99 per cent economic interest in Five Forty Aviation and the latter remains majority owned by 530 Investments Ltd (the investment vehicle of Don Smith) based in Nairobi. “It thus maintains its independence from FastJet.
Copies of all licence agreements and returns of the Registrar of Companies in Nairobi (Kenya) are available on request,” reads part of the statement. In a separate statement, the chairman of FastJet Plc, Mr David Lenigas, said the accusations levelled against the company are aimed at undermining its business credibility and reputation.
London Stock Exchange’s AIM listed FastJet, which was formerly known as Rubicon Diversified Investments Plc, acquired Lonrho Aviation in June, last year, and thus gaining control of assets and liabilities of the company in Tanzania, Angola, Kenya and Ghana.
The new company rebranded in Tanzania from Fly540 to FastJet Tanzania in November, last year, but it continued using Fly540 brand in Angola and Ghana. However, FastJet and Five Forty Aviation have of late been embroiled in legal disputes with the latter accusing the former of failing to comply with sale agreements.
Five Forty said on Wednesday this week that it had withdrawn licences it had granted Lonrho Aviation (FastJet Africa Operations) in Tanzania, Angola and Ghana. It also stated that it had informed respective civil aviation authorities to that affect. Surprisingly, the Tanzania Civil Aviation Authority (TCAA) declared that it had not received any official communication from Five Forty Aviation regarding the withdrawal.
The authority’s Director General, Mr Fadhili Manongi, however, said TCAA is closely monitoring the legal disputes between the two airlines to establish their impact in the local aviation industry. FastJet’s Chief Executive Officer (CEO), Mr Ed Winter, maintains that Five Forty Aviation has no powers to terminate purported brand licence agreements for any Fly540 operations.
“The owner of Five Forty Aviation has no authority to withdraw the licence. We are now consulting legal advisors in East Africa as we are now preparing to take legal actions against him if he does not stop the accusations,” Mr Winter said. Mr Smith maintains, however, that the licensing agreements are in writing and are evidenced in various financial statements.