BA seeks vote to stay British

British Airways will tomorrow seek approval from investors to adopt a new ownership structure that will protect its international flying rights and improve trading in its shares.

Shareholders will be asked at BA's annual meeting to back the creation of a new "special share" which will guarantee that voting control of the airline remains in UK hands even if the proportion of non-UK shareholders exceed 50 per cent.

Foreign ownership of BA shares now stands at 46 per cent. Under the present rules, BA would be forced to disenfranchise foreign shareholders if the figure rose above 50 per cent.

European Union rules require that a majority of BA shares are owned by EU nationals. At the same time, BA's international traffic rights and route licences depend on it being UK-controlled. If more than 50 per cent of the airline was owned by non-UK European shareholders, these rights would be compromised.

The special share would have no economic value and its sole purpose would be to ensure that votes cast by UK shareholders would, taken as a whole, never fall below 50 per cent. The special share will be held by the Law Debenture Trust Corporation, one of the UK's largest corporate trustees, and would only be triggered by a notice given by BA's directors

A spokesman played down suggestions the purpose of the move was to make it easier for BA to merge with another airline, saying that takeover activity was not high on the agenda.

At the meeting, to be held in the Grosvenor House hotel in London, Lord Marshall, BA's chairman, will seek re-election for two more years. There is continuing speculation that Martin Broughton, chief executive of the cigarette manufacturer BAT, is being lined up as a replacement.