ATW Daily News

EasyJet founder Haji-Ioannou boosts stake, seeks more influence

Monday November 17, 2008

EasyGroup Holdings, the company of easyJet founder Stelios Haji-Ioannou, appears to be heading toward a confrontation with the airline's current board and management as easyGroup increased its shareholding and voting rights in the LCC to 26.9% from 15.6% and requested the prompt appointment of two directors.

Haji-Ioannou, who launched the airline in 1995, also reserved his right to appoint himself as chairman in the event the two directors, who are easyGroup employees, are not appointed.

"In all the circumstances I would like to make it clear up front that the other nonexecutive directors and I fully support the executive management of the company," easyJet Chairman Colin Chandler said, conceding there has been a "far-reaching debate" with Haji-Ioannou over strategic direction. "Despite the board's already cautious approach, Sir Stelios has indicated that he wishes the company further to restrict future aircraft orders, to make future dividend payments in conjunction with a cessation or slowing of growth," Chandler said.

EasyJet has not paid a dividend since its November 2000 IPO. "I am merely applying my rights. . .to protect my investment in easyJet," Haji-Ioannou noted in a statement.

According to a Citi Investment Research report, Haji-Ioannou and easyJet are locked in a dispute over the definition and extent, under the airline's brand license (written in 2000), of the noncore ancillary revenue initiatives that it legally can pursue. The case is expected to be settled by a High Court judge within the next 18 months.

EasyJet will report results for its fiscal year ended Sept. 30 on Tuesday. It said its pre-tax profit "is expected to be in line with market consensus." In July it forecast a pre-tax profit excluding "one-off costs" of £110-£120 million.

by Cathy Buyck

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