Wizz Air’s biggest shareholder, U.S.-based private equity agency Indigo Partners, carried out a long-time plan to reduce its stake in the firm as the Budapest stationed low-cost airline works to follow European Union ownership rules.
Bill Franke, founder and managing associate of Indigo Partners and a veteran American low-cost airline investor, is chair of Wizz Air. Indigo pared its stake to 3.4% from 20.6%,
Airlines must be over 50% controlled by European Economic Area nationals to operate flights inside the bloc; otherwise, the rights of non-EEA stakeholders have to be constrained to allow operations to continue.
Wizz, which dominates central and Eastern Europe, stated in April 2019 it was seeking more EU buyers to adjust to EU share-possession guidelines, or it may lose the suitable to fly inside the bloc after Brexit.
JP Morgan, the bookrunner on the sale, mentioned given Indigo’s shares weren’t held by EEA nationals below EU guidelines, the share sale would “at a minimal, preserve Wizz’s present degree of EEA qualifying possession, however extra doubtless improve qualifying nationwide possession”.
On Tuesday, Indigo Partners stated it offered around 12.5 million shares of Wizz Air at a three.5% low cost to the stock’s last close.
The stake sale, at a price of 4,015 pence a share, raised proceeds of about 500 million pounds ($648.45 million) and left Indigo Partners with holdings of nearly 3.4% in Wizz Air, or 2.5 million shares.
Before the sale, the Indigo Partners held 20.6% of Wizz Air, which was valued at about 624 million pounds following Monday’s close.