The son of a Greek millionaire, Stelios launched the budget airline in 1995, floating EasyJet on the London Stock Exchange in 2000. The flotation diluted his stake to 15.6 per cent and Colin Chandler was appointed as chairman of the board.
Stelios’ subsequent clashes with the easyJet board of directors have been well-documented. Yet again, the entrepreneur’s struggles have made it into the press. This time the row concerns strategy. The aviation industry has taken a battering, In response, the EasyJet board has decided to slow growth to single digits, down from 15 per cent year-on-year.
But Stelios demands further caution. He wants to halt expansion completely and use the reserved funds to pay a dividend for the first time since the company’s incorporation.
The EasyJet directors met last Thursday to discuss these options. Chairman Sir Colin believed that a resolution had nearly been reached when Stelios made the shock move to increase his stake in the company to 27 per cent, becoming the majority shareholder. He is now trying to exercise his newfound powers to appoint two new non-executive directors; men who are already on the payroll of easyGroup Holdings, his investment vehicle.
Sir Colin issued a statement from the EasyJet press office on Friday saying: “The ongoing dialogue with Sir Stelios continued during the scheduled meeting of the Board on 13 November 2008 following which it appeared as though a resolution of these matters was within reach prior to receipt of the letter from Sir Stelios last night. In the circumstances, despite what we expect to be a continuing dialogue with Sir Stelios in anticipation of resolving the strategic debate, the remainder of the Board believe that some context is required to accompany the announcements of the share transfer to easyGroup and the related request for the appointment of new nominee directors.”
Translation: This move came out of nowhere. It’s caught us by surprise. We are suddenly powerless and want him to explain himself.
It’s a triumph of the entrepreneur over the moneymen. But it remains to be seen whether Stelios’ strategy bears fruit, or whether his decision to halt to the purchase of new aircraft will hit revenues. Preliminary results for the airline are due out tomorrow.
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