Ryanair pushes button on plan to disenfranchise UK shareholders in event of no-deal Brexit

Airline says that UK investors will be barred from voting, speaking at or attending AGMs. British citizens and institutions will also no longer be able to buy shares in the company, to ensure that it is majority owned and controlled by EU citizens

Grounded: UK investors in Ryanair will lose all their rights in event of no-deal Brexit (EPA)

Got shares in Ryanair? If you live in the UK you’re in danger of losing all your rights.

The airline has warned in the past that it will, in effect, disenfranchise its UK shareholders if this country’s catastrophically stupid government tips us off the no-deal Brexit cliff edge.

With the clock ticking down, its warning has gone from threat to reality, as with so much else in the quite astonishing political freak show.

The airline this morning announced that its board on Friday passed resolutions meaning that from the date of a “hard” no-deal Brexit, ordinary shares held by Britons will be classed as “restricted”.

What that means is that their holders, regardless of whether they are institutions or individuals, will not longer be eligible to vote on company resolutions. They will thus be denied a say on the appointment of company directors, including the CEO and chair, on deals the company might enter into, on the annual report, boardroom pay, on anything of consequence in fact.

They will no longer be able to speak at or even attend the company’s AGM for as long as the shares are treated as restricted. Britons will also be blocked from buying any new shares in Ryanair.

At this point you might very well be asking how on earth can the company can do this.

Well, Ryanair’s an airline, and under the rather arcane rules that exist around the world concerning airline ownership, it needs to be majority owned and controlled by EU investors to be able to fly around the bloc, which is where its majority of the business comes from.

To ensure this remains the case in the event of a no-deal Brexit, the company has taken the step courtesy of the powers granted to its board by its articles of association.

It is possible someone may attempt to challenge the move. But if the no-deal cliff edge crumbles they, and everyone else, will likely have bigger issues to deal with. So I wouldn’t get your hopes up.

There is an interesting wrinkle to this. According to Ryanair’s most recent annual report, EU citizens held 52.8 per cent of the company. UK institutions and individuals make up a significant proportion of that.

Much of the non-EU part is owned by Americans via American Depository Receipts (ADRs) which are a specific type of paper that non-US companies sell to US investors and that are tradable on US exchanges.

So in theory, EU shareholders could be in the minority even if its UK shareholders are stripped of their rights. It will be interesting to see how the company works its way around that one. But this being Ryanair, you would presume the company had considered the issue and worked out a plan.

Ryanair is popular in with US investors because it is very low cost, and not overly fond of unions. Its directors won’t want to upset what has been a largely supportive part of its investor base.

By contrast, much of the fuss about the airline’s business practices has been made on this side of both the Atlantic and Irish Sea.

The company has been sharply critical of Brexit. Indeed, a lot of people who wouldn’t normally be fans of its bumptious boss Michael O’Leary will have found themselves nodding their heads in agreement over what he’s said on the subject, and that of the UK’s dismal political leadership. He memorably, and accurately, described both Theresa May and Jeremy Corbyn as “idiots”.

Ryanair makes clear in its statement that it would prefer “common sense” to prevail. But if that doesn’t happen, the airline’s move will relieve it of some of its noisier critics. Every cloud, as they say...