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(Adds easyJet statement)
LONDON, April 6 (Reuters) - Stelios Haji-Ioannou, easyJet's
founder and biggest shareholder, on Monday intensified
his battle with the airline's management over a huge aircraft
order with Airbus which he says it should cancel.
Haji-Ioannou said in a statement that he had told the
airline he would not provide it with any new equity until it
terminates a 4.5 billion pound deal with Airbus. He said he
tried to change the company's stance by calling for the removal
of two of its directors.
Stelios, as he is better known, says that the 107 planes on
order are "useless", after the coronavirus pandemic brought air
travel to an almost standstill. The huge bill for the planes
puts easyJet's survival at stake, he said.
Airlines across the world are struggling to say afloat.
Whole fleets are now grounded, including easyJet's 344 planes,
due to travel restrictions and plunging demand over fears of
contagion.
Separately, easyJet provided an update on its financial
position on Monday.
It said a 600 million pound issue of commercial paper
through the government's Covid Corporate Finance Facility, and a
request to draw down on its revolving credit facility meant it
would have access to cash reserves of 2.3 billion pounds by
April 9.
"Given the possibility of a prolonged grounding easyJet will
continue to consider further liquidity and funding options," the
company said in a statement.
Stelios said easyJet will run out of money by August and
said he would not help it financially until the Airbus order is
cancelled. He also said he wants easyJet to reduce its fleet
size to 250.
Britain has told its airlines to raise new money from
shareholders before it would consider helping them. While
easyJet is taking advantage of government help schemes for
businesses, it has not requested any specific state bailout.
INFLUENCE
Under UK company rules, Stelios's only way of influencing
management's behaviour is to call for a shareholder meeting to
vote for the removal of directors.
He plans to write to easyJet's chairman to call for two
directors to be removed, adding Chief Financial Officer Andrew
Findlay to an earlier call for the removal of Andreas Bierwirth.
When asked about Stelios's plans, the airline said that it
believed holding a general meeting would be an unhelpful
distraction at the current time.
The Luton-based budget airline on Friday rejected Stelios's
first call for a general meeting to remove Bierwirth on what
Stelios's team called a technicality, but a meeting, held
electronically, will have to go ahead at some point, his
spokesman said.
"I fully expect easyJet to follow the stipulations of the
Companies Act 2006 and to call a meeting within a three week
period," said a spokesman for Haji-Ioannou.
The Haji-Ioannou family owns about a third of easyJet's
shares and Stelios has been a long-time critic of the airline's
expansion plans.
EasyJet also said in its statement it had agreed a deal with
a union to furlough its pilots under the government's job
retention scheme. It agreed a deal with cabin crew last week.
($1 = 0.82 pounds)
(Reporting by Sarah Young in London, additional reporting by
Juby Babu in Bengaluru; editing by Angus MacSwan and David
Evans)
