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Fastjet chairman resigns as African carrier seeks more funds

(Reuters) - Fastjet Plc (FJET.L) said it would seek more funds sooner than expected to restructure itself, prompting its Chairman Colin Child to resign after the African budget carrier's months-long tussle with its second-biggest investor to retain him.

Fastjet said the cost and terms associated with returning leased aircraft was more onerous than expected and that it would need to raise further capital after having raised funds in July.

The carrier said on Friday it planned to complete its fund-raising exercise in the first quarter of 2017.

The carrier is looking to cut costs after struggling against tough conditions in its home market, Tanzania. In March, it warned that its full-year results would be well below market estimates and that it would no longer be cash flow-positive this year.

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EasyGroup Holdings Ltd, which owns 12.6 percent of Fastjet, was vetoed by the company's other investors when it earlier this year sought to oust Chairman Child, alleging he failed to relocate the airline's head office quickly and criticised him for a high cost base.

EasyGroup, which is controlled by easyJet founder Stelios Haji-Ioannou, had used arguments similar to those it used to push for the exit of former CEO Ed Winter in March.

"Having led the fund raising exercise in July this year, Colin believes that it would not be appropriate for him to continue in this role given the company is initiating, sooner than originally expected, a further fund-raising exercise," the company said in a statement.

Nico Bezuidenhout, who joined as CEO from rival Mango Airlines in June this year, would assume the role of interim chairman until a new permanent non-executive chairman was appointed, Fastjet said.

EasyGroup Holding did not immediately respond to a request for comment.

Fastjet said with the necessary capital, the company could break even by fourth quarter of 2017.

Launched in 2012, Fastjet offers "no frills" flights to undercut larger carriers, seeking to copy the model pioneered by Stelios-founded easyJet (EZJ.L) and Ryanair Holdings (RYA.I).

Shares in Fastjet, which have fallen more than 77 percent until Thursday's close, were down more than 15 percent at 13.95 pence on the London Stock Exchange at 0830 GMT.

(Reporting by Esha Vaish and Rahul B in Bengaluru; Editing by Sunil Nair and Gopakumar Warrier)