On 7 February 2019, easyJet PLC (LON:EZJ) announced details of the contingency plan that it will activate, if required, to ensure continued compliance with EU ownership and control requirements in a “no deal” Brexit scenario.
Following this, on 13 March 2019, new EU regulations were adopted, which will give airlines 6 months to comply with applicable EU ownership and control requirements following a “no deal” Brexit, provided that an airline submits an acceptable remedial plan.
Since then, our EU (excluding UK) ownership (Note 1) has increased to 49.92%, however, this is still below the 50% plus 1 share that will ultimately be required following Brexit.
Accordingly, the Board continues to stand ready to activate the contingency plan of suspending shareholders’ voting rights in respect of a small number of shares on a last in first out basis, in accordance with existing provisions of our Articles of Association. 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. Further information regarding the possible suspension of voting rights can be found on easyJet’s website at: http://corporate.easyjet.com/investors/shareholder-services/eu-share-ownership
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. 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%). Upon activating our 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. A further update will be provided in due course.
We expect to keep the EU ownership position under review following Brexit. As stated in our announcement of 7 February 2019, if EU ownership remained below the required level over time, the Board retains the right to activate the existing provisions of our Articles, which permit the Company to compel non-EU shareholders to sell their easyJet shares to EU nationals.