EasyJet PLC (LON:EZJ) founder Stelios Haji-Ioannou has referred the airline to the City watchdog and hired lawyers to try and extract more details from the company about a £4.5bn order of aeroplanes from Airbus.
Calling the FTSE 100 airline’s board “scoundrels” after they agreed to defer 24 aircraft deliveries scheduled over the next three years, Haji-Ioannou said this new arrangement “must be put to a shareholder vote”.
As per Haji-Ioannou’s calculations, the airline has committed to purchase 107 new aircraft from Airbus by the end of 2022, of which 24 have been deferred.
Lawyers on behalf of the 34% shareholder have sent a letter to the Financial Conduct Authority claiming the announcement last Thursday was “vague and incomplete and gives little meaningful indication of the obligations being deferred, the legal basis of the deferral, or the financial consequences”.
With easyJet having agreed a £600mln loan from the UK government last week, repayable in March 2021, the lawyers’ letter said it was “wholly unclear what the company intends to do with this loan, especially in light of the purchase deferral which has been announced”.
The airline’s founder, the lawyers said, is “concerned that in fact a substantial portion of this loan will in practice be used to pay Airbus for delivery of expensive aircraft in 2020 which will be unprofitable for the company, earn no revenues and hence the company will not be able to repay the UK taxpayer”.
Last week Haji-Ioannou threatened to sue easyJet's executives if the carrier went ahead with the Airbus order and requisitioned a shareholder meeting to remove non-executive Andreas Bierwirth and CFO Andrew Findlay as directors of the airline, following an original letter where he described the aircraft order as the “main risk to survival of the company”.
Putting the “new deal with Airbus” to a shareholder vote was the central crux of his latest statement, issued on Tuesday afternoon.
“The scoundrels at easyJet do not have the corporate authority to cut such a deal given the collapsed share price and the monumental size of the Airbus order,” he said on the website of his easyGroup company.
“If the FCA does not force the scoundrels to call a shareholder vote on new deal with Airbus, easyGroup will not hesitate to seek a judicial review.
“In plain English that means going to High Court judge to ask for an injunction to require the regulators to do their job properly.”