EasyJet ready to suspend voting rights in wake of no-deal Brexit

EasyJet said on Friday that it was ready to activate its Brexit contingency plan of suspending shareholders' voting rights in respect of a small number of shares on a last in first out basis, given it still had not reached the 50% plus one share of EU ownership it required.

The FTSE 100 low-cost airline said in recent weeks, its EU, excluding UK, ownership had increased to 49.92%.

It noted that on 13 March, new EU regulations were adopted, which would give airlines six months to comply with applicable EU ownership and control requirements following a no-deal Brexit, so long as the airline submits an acceptable remedial plan.

EasyJet said its voting rights suspension policy was in accordance with existing provisions in its articles of association, explaining that for the period of any such suspension, the relevant shareholders would not be permitted to attend, speak or vote at shareholder meetings in respect of the shares subject to the suspension.

“In due course, and to help facilitate the contingency plan (if required), the company expects that it will set a permitted maximum of non-EU ownership in accordance with the existing provisions of our articles,” the board said in its statement.

“To ensure there is some headroom for the company to maintain compliance with the EU ownership and control requirements, the permitted maximum will likely be set such that the contingency plan would take effect if EU ownership remains or falls below 50.5%, and therefore non-EU ownership remains above 49.5%.”

EasyJet said that upon activating its contingency plan, if required, the suspension of shareholders' voting rights would apply to non-EU shareholders, on a last-in, first-out basis, to the extent required to maintain compliance with the EU ownership and control requirements, and to all shares subsequently acquired by non-EU, including UK, nationals.

“The suspension would apply, to the extent required, until EU, excluding UK, ownership reaches the 50.5% level or above.

“Whilst the new EU regulations make it unlikely that the company will be required to take any immediate action to implement the permitted maximum or contingency plan in connection with Brexit, the timing of implementation, if required, will depend on the outcome of Brexit negotiations.”

The airline said it expected to keep the EU ownership position under review following Brexit.

As it stated in its announcement of 7 February, if EU ownership remained below the required level over time, the board retained the right to activate the existing provisions of its articles, which permit the company to compel non-EU shareholders to sell their easyJet shares to EU nationals.