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GreekReporter.com Business After 26 Years, Sir Stelios Loses Control of EasyJet

After 26 Years, Sir Stelios Loses Control of EasyJet

Sir Stelios easyjet
Sir Stelios Haji-Ioannou has lost his grip on easyJet, the company he founded in 1995. Credit: easyGroup / Wikimedia Commons

EasyJet founder Sir Stelios Haji-Ioannou has lost his control over his budget airline, after the company raised £1.2 billion in extra cash. Sir Stelios’ blocking stake is now diluted after he chose not to purchase new shares in a rights issue following a takeover swoop by low-cost rival Wizz Air.

The Greek Cypriot billionaire and his family now own 15.3% of the airline as a result, down from 25.3%. Going under the 25% threshold means that Sir Stelios is unable to veto key decisions by the board that require the support of three-quarters of shareholders.

Sir Stelios founded easyJet in 1995, at the age of 28, using a £5 million loan he secured from his shipowner father. He launched it almost immediately afterward, by running a service between Luton, England and Scotland.

Watershed moment for Sir Stelios

The dilution marks a watershed moment for the Greek businessman. The airline came to prominence when Sir Stelios and his staff starred in the second season of a television documentary series in 1998 in the UK.

EasyJet was later floated on the London Stock Exchange. The tycoon retained around a third of the business until relatively recently. Sir Stelios has repeatedly clashed with easyJet’s management over plans to expand the airline.

After easyJet tapped shareholders at the start of the pandemic, he warned he would not back the board if they returned to the market to ask investors for more cash. Sir Stelios declined to comment on the dilution of his stake in easyJet.

EasyJet shareholders back investment plan against Sir Stelios’ wishes

Some 93% of shareholders backed the £1.2 billion rights issue. It was put in place to pay down debt and capitalize on the problems facing “legacy” carriers, such as British Airways. Shares ended 2.7% lower at 690p, valuing the company at £5.2billion. The stock was at 412p at this time last year.

EasyJet’s position has been strengthened in the last week after BA’s plan to launch a new short-haul airline at Gatwick in the UK were scuppered by its pilots voting down the proposals.

BA will continue to operate long-haul services from the airport. Still, it is unclear if it will sell the Gatwick landing slots or transfer them to another IAG airline such as Aer Lingus or Vueling.

Four years ago, Sir Stelios pledged to give away the majority of his fortunes, according to his letter on the Giving Pledge site. He was one of 14 new signatories to the Giving Pledge.

The Giving Pledge was created by Bill and Melinda Gates along with Warren Buffett, as a way to give back to society. Its plan is to have the world’s wealthiest individuals donate the majority of their personal wealth to philanthropic causes.

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