Ryanair, Wizz Air restrict UK shareholder rights to keep EU licence post Brexit

Ryanair Holdings plc (LON:RYA) and Wizz Air Holdings (LON:WIZZ) said that their UK shareholders will lose the right to attend, speak or vote at any general meeting from January 1, 2021, to ensure they hold onto their EU flight rights post-Brexit.

From Friday, the two European budget airlines said the voting rights of British shareholders will be restricted and there will be a ban on further purchases of ordinary shares.

Dublin-based Ryanair said it “must take steps to ensure that it (and therefore its subsidiary EU airlines) will remain majority EU owned and controlled following Brexit”.

From the start of 2021, the Irish airline said all of its shares held by people not from the EU, including UK nationals, will be treated as restricted shares and so they will lose their rights to participate in shareholder meetings.

UK investors will also be prevented from buying shares in Ryanair, a restriction that has been in place for non-EU nationals since 2002, though current UK shareholders will not be required to sell shares they already own.

Budapest-based Wizz Air, which is a member of the FTSE 250, similarly said that from January 2021 UK nationals will no longer be treated as qualifying nationals.

“As a result and without any action, from that date, the company will be approximately 80% owned by non-qualifying nationals.”

While companies say these changes are essential, there is a chance these restrictions for non EU nationals will be dropped if shareholder register changes sufficiently.

Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown said this “may be a footnote as far as Brexit repercussions go but… underlines how leaving the bloc has some intricate implications for financial markets”.

She added: “Like the many ‘i’s to be dotted and ‘t’s to be crossed as the Brexit implications are unravelled, there is speculation the new ownership rules could be relaxed, but in the meantime this is another lingering headache airlines are having to deal with amid the continuing coronavirus crisis.”