Ryanair and Wizz Air have announced they will restrict the rights of certain shareholders to ensure they continue to abide by European Union regulations on airline ownership after Brexit.
The two airlines, which are both listed on the London Stock Exchange, say ordinary shares held by non-EU nationals will be treated as restricted shares that do not confer the right to attend or vote at annual meetings.
The changes will be effective from January 1, when the Brexit transition period between the UK and EU ends.
EU regulations state airlines must be majority owned and controlled by EU nationals to hold an operating license. Brexit has thrown up a dilemma because many shareholders are based in the UK and will no longer qualify as EU nationals from the start of next year.
Without any action, Wizz Air would have ended up with 80 percent ownership by ‘non-qualifying nationals,’ says the Hungary-based airline in a statement. The company expects to serve restricted share notices covering around 60 percent of ordinary shares.
Last year, Ryanair’s board agreed a plan to change the rights of non-EU shareholders in case of a no-deal or ‘hard’ Brexit. At the time, the airline said it was 55 percent owned by EU nationals but UK-based investors controlled around 20 percent of the shares, according to Reuters.
In a statement released yesterday, Ryanair says restricted share notices will now be sent out, explaining that holders of such shares ’shall not be entitled to attend, speak or vote at any general meeting of the company’.
Companies have been pouring over the ramifications of the trade and security deal agreed between the UK and EU on December 24. The treaty, which runs to more than 1,200 pages, retains tariff-free trade between the two sides but will see many changes to how cross-border industries operate.
One area where negotiation will continue is financial services. The EU says it needs more information from the UK on its future plans before deciding what market access to offer.
The EU operates a system of ‘equivalence’ with the financial markets of other countries, such as the US and Japan. Under this approach, each side declares the other’s regulations as ‘equivalent’ and then opens up access, although not to all services.
