LONDON Lonrho LONR.L on Wednesday said it had sold its aviation business to British investment firm Rubicon RUBI.L allowing it to create Africa-focused low cost airline FastJet with EasyJet (EZJ.L) founder Stelios Haji-Ioannou's easyGroup.
Lonrho said it had sold the unit to Rubicon RUBI.L for $85.7 million. As part of the deal Stelios' easyGroup will own 5 percent of Rubicon.
"Following completion Rubicon will pursue a strategy of developing a low cost African airline utilizing the Lonrho Aviation route network and existing platforms," Lonrho said in a statement.
"Under a licensing agreement with easyGroup, the airline will be branded FastJet and will use modern jet aircraft and operate to European standards."
Earlier this year Stelios unveiled plans to set up another airline and call it fastjet, stoking tensions between easyJet management and Stelios, whose family is the largest easyJet shareholder with 38 percent.
Former easyJet chief operating officer Ed Winter will become chief executive of FastJet, while Stelios has the right to be personally appointed to the Rubicon board as one of easyGroup's board representatives.
(Reporting by Rhys Jones; Editing by Helen Massy-Beresford)