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EasyJet on course for clash with founder Stelios
27th Apr 2020 13:24
(Sharecast News) - EasyJet has called a meeting of shareholders in May to vote on a bid by founder Stelios Haji-Ioannou to oust the airline's bosses in a dispute over a £4.5bn aircraft order.
The budget carrier urged shareholders to vote against Haji-Ioannou's demands as it published a rebuttal to his criticisms. The billionaire wants to remove Chairman John Barton, Chief Executive Johan Lundgren, Chief Financial Officer Andrew Findlay and another board member.
EasyJet said cancelling the Airbus contract for 107 new planes would be against the company's long-term interests and be so expensive that it would struggle to remain a low-cost airline. Removing the company's leaders would disrupt it at a time of crisis, it said.
Barton said: "The resolutions to remove the directors are an attempt to force easyJet to terminate its Airbus contract. This is not in the best interests of the company or its shareholders as a whole ... Removing four directors from the board, including the chairman, CEO and CFO, would be extremely damaging and destabilising at this critical time."
Haji-Ioannou has been at odds with the company over the order from Airbus for many years but stepped up his campaign after the Covid-19 crisis forced easyJet to ground its fleet of 337 planes. He said easyJet shares would be worthless if the deal went ahead.
In a letter to shareholders Haji-Ioannou said easyJet was likely to become insolvent in 2020 if its board bought the planes. He threatened to sue the directors if easyJet went into administration having paid money to Airbus.
Haji-Ioannou said he had seen no evidence that easyJet could remain solvent and pay Airbus £1.5bn in the next nine months under the deal. He accused the board of being "wildly optimistic" about the prospects for the airline industry after the Covid-19 crisis, arguing it would take years for European air travel to come back.
"If the Airbus order is affirmed by these directors, the most likely outcome is that our shares will become worthless on or about December 2020, Haji-Ioannou said in the letter. "I will sue the directors personally for breach of their fiduciary duty if the company is placed into administration having paid to Airbus even a single penny post the grounding."
Haji-Ioannou's family owns 34% of the airline he founded in 1995. The value of his stake fell by more than £1bn in a month as easyJet shares plunged during the crisis.
Shareholders will not be able to attend the general meeting in person and will have to vote by proxy before 10:00 BST on 20 May.
The budget carrier urged shareholders to vote against Haji-Ioannou's demands as it published a rebuttal to his criticisms. The billionaire wants to remove Chairman John Barton, Chief Executive Johan Lundgren, Chief Financial Officer Andrew Findlay and another board member.
EasyJet said cancelling the Airbus contract for 107 new planes would be against the company's long-term interests and be so expensive that it would struggle to remain a low-cost airline. Removing the company's leaders would disrupt it at a time of crisis, it said.
Barton said: "The resolutions to remove the directors are an attempt to force easyJet to terminate its Airbus contract. This is not in the best interests of the company or its shareholders as a whole ... Removing four directors from the board, including the chairman, CEO and CFO, would be extremely damaging and destabilising at this critical time."
Haji-Ioannou has been at odds with the company over the order from Airbus for many years but stepped up his campaign after the Covid-19 crisis forced easyJet to ground its fleet of 337 planes. He said easyJet shares would be worthless if the deal went ahead.
In a letter to shareholders Haji-Ioannou said easyJet was likely to become insolvent in 2020 if its board bought the planes. He threatened to sue the directors if easyJet went into administration having paid money to Airbus.
Haji-Ioannou said he had seen no evidence that easyJet could remain solvent and pay Airbus £1.5bn in the next nine months under the deal. He accused the board of being "wildly optimistic" about the prospects for the airline industry after the Covid-19 crisis, arguing it would take years for European air travel to come back.
"If the Airbus order is affirmed by these directors, the most likely outcome is that our shares will become worthless on or about December 2020, Haji-Ioannou said in the letter. "I will sue the directors personally for breach of their fiduciary duty if the company is placed into administration having paid to Airbus even a single penny post the grounding."
Haji-Ioannou's family owns 34% of the airline he founded in 1995. The value of his stake fell by more than £1bn in a month as easyJet shares plunged during the crisis.
Shareholders will not be able to attend the general meeting in person and will have to vote by proxy before 10:00 BST on 20 May.