Ryanair seeks to limit UK share holding with buyback amendment

Airline triggered Brexit contingency plans in March to ensure majority EU ownership

Photograph: Francois Lenoir/Reuters
Photograph: Francois Lenoir/Reuters

Ryanair amended the terms of a €700 million share buyback on Wednesday to allow it make block repurchases it said could limit the holdings of British shareholders and ensure it remains majority EU-owned after Brexit.

Ryanair triggered contingency plans in March to restrict the voting rights of British shareholders if the UK leaves the European Union without a deal on future relations or quits both the EU customs union and single market in a "hard" Brexit scenario.

The restrictions are aimed at ensuring Europe’s largest low-cost carrier remains majority EU-owned to comply with its licensing and flight rights.

“Ryanair advises that it is amending the terms of the arrangements to allow for shares to be repurchased by way of block trades from EU holders of shares,” the airline said in a statement on Wednesday.

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“Any such block repurchases from UK holders will, in the event of a no-deal or “hard” Brexit, limit the proportionate number of shares held by or on behalf of non-EU shareholders and should therefore reduce the period that the resolutions announced on March 11th would need to remain in place.”

Hard Brexit

Ryanair chief financial officer Neil Sorohan said in February that while the airline was 55 per cent EU-owned, Britain-based shareholders controlled 20 per cent of its stock. He told Reuters he expected half of those to redomicile to the EU in a no-deal or "hard" Brexit.

Ryanair announced the €700 million buyback last month, guiding that it expected to split it between €500 million of shares in underlying American Depositary Shares (ADS) and €200 million of ordinary shares, but that the board had discretion to revise this allocation.

It said on Wednesday that the split between ADR’s and ordinary shares will be dependent on market conditions and legal and regulatory requirements. The programme is due to take nine to 12 months. – Reuters