Billionaire founder of easyJet refuses to invest any more money in budget airline amid speculation that company plans to tap investors for more cash
The billionaire founder of easyJet has refused to invest any more money in the budget airline amid speculation that the FTSE250-listed company plans to tap investors for more cash.
There is speculation that the firm – in which Sir Stelios Haji-Ioannou’s family vehicle is the largest shareholder – will ask investors for new funds for the second time within 12 months to secure its financial position.
City sources said some investors may have already been sounded out about a potential share fundraising. In January, analysts at Citigroup said the airline could need another £300million of equity to keep its debt to earnings level at a sustainable level.
Standing firm: Sir Stelios Haji-Ioannou’s family vehicle is the largest shareholder in easyJet
Haji-Ioannou, who last week made millions by selling shares and reducing his family’s holding in the airline to 27.7 per cent, told The Mail on Sunday: ‘At the rate that the scoundrels [what he calls the management team] are destroying the equity of the company, it is inevitable that more equity will have to be raised from investors.
‘They lost £1.5billion in the year to September 2020 and my guess is that they will lose a similar sum this year. For as long as the scoundrels squander the company’s money on more Airbus planes, I am not going to invest any of my money with them.’
EasyJet, which is completing a £4.5billion order of 107 Airbus planes, raised £420million last summer by placing new shares with investors after its fleet was grounded.
Early in the pandemic, easyJet borrowed £600million from the Government. The unsecured loan must be paid back next month. Last week, it raised €1.2billion (£1billion) by issuing a bond to be repaid in 2028.
A spokesman for easyJet said: ‘We will continue to review our liquidity position and to assess further funding opportunities should the need arise.’