Shares in Fastjet – the budget African airline founded by Stelios Haji-Ioannou – soared after the company secured up to $12m (£9.1m) in emergency funding.
The company warned earlier this week that it might go bust, but it announced on Friday that it will raise $7m through a share sale, while Solenta Aviation, its biggest shareholder, will provide a further $3m. In addition Fastjet wants to raise up to $1.6m through an open offer.
Following the announcement, shares jumped 136 per cent.
It came after the company revealed on Wednesday it had just $3.3m in cash left.
The funds will provide the group with “sufficient working capital for the remainder of 2018”, Fastjet said.
Fastjet also revealed large annual losses and revenues down by more than a third from $68.5m to $46.2m.
The company has been slashing costs over the past two years in an attempt to turn its fortunes around.
Neil Wilson, chief market analyst at Markets.com, said: “Lower costs, in particular, should be welcomed by investors, but how they got to this state where they are at risk of running out of cash today is pretty shambolic.”
AJ Bell investment director Russ Mould said: “A turbulent week for African budget airline Fastjet is ending on a marginally brighter note as the company announces plans for a $10m fundraise which provides enough working capital to see it through the remainder of 2018.
“This emergency capital raise should not obscure the fact that this is a business in serious trouble. Since the middle of 2016 it has had to return to the market for cash on five separate occasions and you have to question when investors will run out of patience with the company.”
Additional reporting by PA