Budget airline Ryanair gave notice on Friday of its intention to delist from the London Stock Exchange after having announced the plan earlier this month due to Brexit and a fall in trading volumes there.
It is the first major company to blame its departure on Brexit. Regulations now limit non-EU investors from owning more than 49 per cent of airlines registered in the bloc.
The move will enhance the significance of Ryanair’s primary listing in Dublin.
Ryanair previously said the rules made a general migration away from London for EU companies more acute in its case. As well as its share listing on the Iseq, Ryanair’s American depositary receipts are traded on New York’s Nasdaq.
Ryanair chief financial officer Neil Sorahan noted during a presentation of the company’s interim results in recent weeks that less than 10 per cent of its shares traded in London.
He said Ryanair would seek shareholders’ views before reporting back to the board, which would decide on the move.
Even after taking several steps to limit non-EU ownership, just over one-third of Ryanair’s shares are held from EU member states, chief executive Michael O’Leary told Bloomberg TV earlier this month.
He said then that the carrier would need to take added steps to bring the total over 50 per cent. “It’s an inevitable consequence of Brexit,” he said. “We must be EU-owned and controlled, and delisting from London is a reasonably small initiative in that strategy.”
On Friday the directors of Ryanair gave notice of their intention to request the UK Financial Conduct Authority (FCA) to cancel the standard listing of the company’s ordinary shares on the official list of the FCA.
It also asked the London Stock Exchange to cancel the admission to trading of the shares on the main market for listed securities of the London Stock Exchange.
“As indicated at our interim results, and following subsequent shareholder engagement, Ryanair has decided to request the cancellation of London listing,” the group told investors in a note to Euronext Dublin.
It said the move was taken “as the volume of trading of the shares on the London Stock Exchange does not justify the costs related to such listing and admission to trading”.
It further added that the move was being taken “so as to consolidate trading liquidity to one regulated market for the benefit of all shareholders”.
The company is required to give at least 20 business days’ notice of the intended cancellation of listing. Therefore, it is intended that the cancellation of the London listing will become effective from 8am on December 20th, such that the last day of trading of the shares on the London Stock Exchange would be December 17th.
Following the cancellation of the London listing the company will continue to have a primary listing on the regulated market of Euronext Dublin, which offers shareholders “the highest standard of protection, including compliance with the UK corporate governance code”.