The billionaire founder of easyJet is threatening to seek the removal of most of its board members unless it cancels a £4.5bn aircraft order that he warned could threaten its future amid the coronavirus pandemic.
Sky News has seen a letter sent on Sunday by Sir Stelios Haji-Ioannou to John Barton, the low-cost carrier’s chairman, which said he would call an extraordinary shareholder meeting every seven weeks to remove one of its non-executive directors.
Along with other family members, Sir Stelios owns just under 34% of easyJet’s shares.
The entrepreneur is enraged at what he argues is easyJet’s lack of transparency about the order for 107 Airbus planes, which he labelled as “simply shareholder value-destroying”.
He informed Mr Barton that unless his concerns are met by midday on Wednesday, he would begin a rolling programme of calling EGMs every seven weeks to try to remove one of easyJet’s non-executive directors – beginning with Andreas Bierwith.
Prominent business figures who sit on the airline’s board include Moya Greene, the former Royal Mail Group chief executive, and Charles Gurassa, the Channel Four chairman.
Sir Stelios said the Airbus order had saddled easyJet with an existential threat at a time when the world’s aviation industry had effectively been grounded by the COVID-19 outbreak.
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EasyJet has grounded its entire fleet and warned that it can no longer give investors guidance about its financial performance this year.
“Even with a resumption of air traffic, any income from passengers is likely to be too low to keep up with outgoings and would most likely render easyJet insolvent if it continues to pay Airbus for more aircraft,” he wrote.
“This crisis may result in the insolvency of easyJet PLC and if it transpires that a single penny from the company has been paid to Airbus between the grounding of the fleet and the date of the insolvency or any equity-raising which would prevent insolvency, I will personally sue all the easyJet directors for gross negligence and for defrauding easyJet’s creditors with the favouring of one creditor (Airbus with dubious rights to these monies) over all others.”
Sir Stelios’s declaration of war on the easyJet board comes just days after he received a £60m dividend payment from the airline.
In his letter to Mr Barton, he said he had offered to subscribe to new equity in easyJet as part of a wider share issue.
A number of institutional shareholders in easyJet are understood to have been informed of Sir Stelios’s plans over the weekend.
Sir Stelios gave the board until Wednesday to respond to his demands, which include the appointment of an independent law firm to serve notice on Airbus.
He also opposed public statements by easyJet chief executive Johan Lundgren that the company was seeking a government loan on commercial terms to help it weather the coronavirus crisis.
Last week, Rishi Sunak, the chancellor, said any state support for airlines would need to be in taxpayers’ interest and would be available “only as a last resort”.
That comment implied that airlines such as easyJet would need to tap their own shareholders for funding before approaching the government.
Sky News revealed this month that Virgin Atlantic was seeking financial aid from the taxpayer.
It is not the first time that the easyJet founder has been in dispute with the company over the size of its fleet, having settled several disputes with uneasy truces.
Sir Stelios launched the airline in 1995, before floating it in 2000.
EasyJet could not be reached for comment.
SOURCE : https://news.sky.com/story/coronavirus-easyjet-founder-in-threat-to-oust-board-11965507