EasyJet non-exec in line for £5.5m windfall as airline floats

The floatation later this month of easyJet is set to produce a £5.5m windfall for a long-time friend of Stelios Haji-Ioannou, the founder and chairman of the cut-price airline.

The floatation later this month of easyJet is set to produce a £5.5m windfall for a long-time friend of Stelios Haji-Ioannou, the founder and chairman of the cut-price airline.

Easyjet's pathfinder pros-pectus, published yesterday, shows that Amir Eilon, a non-executive director of easyJet and a long-standing acquain-tance of Mr Haji-Ioannou, has been awarded nearly 3.3 million share options at almost half the offer price. His options cannot be exercised for two years.

The price range for the shares of between 250p and 350p values easyJet at between £627m and £878m. At the mid-point, the offer of 63 million shares or 25 per cent of easyJet, values the airline at £753m and would raise £189m.

The proceeds of the flotation will be used to help finance a massive fleet expansion which will help easyJet grow services from its three main hubs, London Luton, Liverpool and Geneva.

The offer stands to generate a £17m profit for easyJet's directors, led by its chief executive Ray Webster who has been awarded almost 4.4m share options potentially worth £7.4m.

Mr Eilon joined easyJet in March last year from Credit Suisse First Boston, one of the two joint bookrunners for the share offer. EasyJet advisers said the share option award was, in effect, a "fee payment in kind" for investment banking advice.

Prior to CSFB, he worked for BZW where he is best remembered for co-ordinating the privatisation of the electricity industry. It is unusual for non-executive directors to be awarded share options in such large amounts.

EasyJet's 330 most senior managers and pilots will each receive an average of 25,000 share options yielding a profit of £42,000 at the top end of the price range. The remainder of the 1,400 staff, ranging from cabin crew and call centre staff to cleaners, will each receive an average of 750 free bonus shares potentially worth £2,250.

Mr Webster said the wide pricing range reflected the volatility in the stock markets and the airline industry.

EasyJet intends to announce a narrower price range during the week ending 10 November once it has completed its roadshows around institutional investors, the only investors eligible for the offer.