Equity Development upbeat on fastjet's Tanzanian disposal

African budget carrier Fastjet’s (LON:FJET) disposal of a 51% stake in its Tanzanian business could unlock substantial value and reinforces the group’s low cost model in Africa, reckons research house Equity Development.

The consideration will be established from placing new shares to local investors to take the proportion of shares they hold in Fastjet Tanzania to a majority 51%.

Equity Developent, which has a target price on the group of 4.9p, reckons the Tanzanian business is worth 3.5p a share alone.

Moreover, this deal illustrated the upside potential of rolling out the Fastjet brand across multiple jurisdictions, it said.

Last week the airline also said it had moved a step closer to getting a licence in Zambia – with the receipt of an Air Service Permit (ASP) from the authorities.

The permit enables Fastjet to operate domestic and international flights from Zambia, though it still needs an Air Operating Certificate (AOC) for commercial flights to start.

Fastjet shares are up 3.23% to 0.80p.