Limitations on Ownership by Non-UK Nationals

RNS Number : 9767K

Dart Group PLC

13 July 2017

 

13 July 2017

Dart Group PLC ("the Company")

Limitations on Ownership by Non-UK Nationals

Dart Group PLC, the Leisure Travel and Distribution & Logistics group, announces that it intends to seek shareholder approval at its forthcoming Annual General Meeting for certain amendments (the "Proposed Amendments") to the Company's Articles of Association (the "Articles") which, if adopted, would allow the Directors to take certain actions to protect Jet2.com's operating and flying rights as a UK airline ("Operating Rights") should the need arise.

In common with other UK airlines, Jet2.com's Operating Rights are granted pursuant to certain UK statutes and EU regulations (as summarised below) which require the Company to be owned and controlled by either UK nationals (or in certain cases EU nationals).

In particular, section 65(3)(a) of the Civil Aviation Act 1982 (the "CAA 1982") allows the Civil Aviation Authority ("CAA") to refuse to grant an operating licence if the applicant is not controlled by UK nationals, unless the Secretary of State consents to such grant. In addition, the Operating Rights under which Jet2.com operates the vast majority of its routes (all of those between member states of the EU) are granted pursuant to the EU Regulation 1008/2008 ("EU Regulation") which requires that, in order to obtain and retain an operating licence, an EU air carrier must be majority-owned and effectively controlled by EU nationals.  The limitations under the CAA 1982 described above are more stringent than those required under the EU Regulation in that they refer to UK nationality rather than EU nationality.  Accordingly for as long as UK nationals qualify as EU nationals, compliance for these purposes with the CAA 1982 will mean that the Company will also be compliant with the ownership requirements of the EU Regulation.

In order to comply with the requirements under both CAA 1982 and the EU Regulation, it is common for listed airlines to include provisions in their articles of association allowing directors to regulate the level of share ownership by non-UK nationals and/or non-EU nationals. Such powers typically include a right for the directors to set a permitted maximum level of shares in which non-UK/EU nationals are interested.

The Proposed Amendments

Under the Proposed Amendments, the Company would maintain a separate register (the "Separate Register") of its shares in which non-UK nationals have an interest (such shares being referred to as "Relevant Shares").  An interest in this context is widely defined.

The Directors would be able to require shareholders, or other persons, to provide them with information to enable a determination to be made as to whether shares are, or are to be treated as, Relevant Shares.  If such information is not available or forthcoming or is unsatisfactory then the Directors would be able, at their discretion, to determine that such shares are to be treated as Relevant Shares.

Registered holders of shares would also be obliged to notify the Company if they are aware that any share which they hold ought to be treated as a Relevant Share.

The Proposed Amendments would allow the Directors in circumstances where they consider it necessary or desirable to protect any Operating Right to take certain actions including the following:

·           identify those shares which give rise to the need to take action and treat such shares as Affected Shares (see below);

·           set a permitted maximum of Relevant Shares (the "Permitted Maximum") beyond which the Directors may treat Relevant Shares as Affected Shares;

·           refuse to register the transfer of a share if it would become or continue to be an Affected Share; and

·           remove any director from the Board.

Under the Proposed Amendments, the Directors may, by serving notice on the registered holder of any share which they determine is an Affected Share:

·           deprive the registered holder of the right to attend, vote, and speak at general meetings of the Company; and/or

·           require the recipients to dispose of the Affected Shares (so that such shares will then cease to be Affected Shares) within 21 days or such longer period as the Directors may determine and, if the shareholder does not comply with the notice, the Directors are given the power to transfer such shares themselves.

If the Proposed Amendments are adopted, the Directors intend to set the Permitted Maximum at 35 per cent.  This Permitted Maximum may be varied by the Directors from time to time and any such variation would be publicly announced.

The Directors believe that the current level of the Company's shares in which non-UK nationals are interested is below the proposed Permitted Maximum of 35 per cent.  However, if the Proposed Amendments are adopted, the Company's registrars will be instructed to carry out a review of the Company's shareholder register to establish the number of Relevant Shares.  As part of this exercise shareholders will be asked to complete and return a declaration, together with such evidence as the Directors may require, stating (a) the name and nationality of any person who has an interest in any such share and, if the Directors require, the nature and extent of such interest; and (b) such other information as the Directors may from time to time determine.  Transferees of shares would also be required to complete such a declaration and the Directors may refuse to register transfers if they fail to do so.

The Company would publish, from time to time, information as to the number of shares entered on the Separate Register.

The Proposed Amendments allow the Directors to relax the ownership limitations such that rather than restrict ownership by non-UK nationals, the limitations will only apply to non-EU nationals at such a level as they believe will comply with the relevant EU licensing regulations.  It is not currently known what impact the UK Government's triggering of Article 50 of the Treaty on European Union and the prospect of the UK leaving the European Union will have on Jet2.com's Operating Rights, if any.  It may therefore be necessary to review such provisions when the regulatory landscape following Brexit becomes clearer.

It is expected that the Company's Annual General Meeting will be held on 7 September 2017 and the notice for such meeting is expected to be sent to shareholders mid-August 2017.

For further information contact:

Dart Group PLC Philip Meeson, Group Chairman and Chief Executive	Tel:       [phone]
Gary Brown, Group Chief Financial Officer
Smith & Williamson Corporate Finance Limited Nominated Adviser David Jones Katy Birkin	Tel:       [phone]
Canaccord Genuity - Joint Broker Bruce Garrow Ben Griffiths	Tel:       [phone]
Arden Partners - Joint Broker Christopher Hardie	Tel:       [phone]
Buchanan - Financial PR Richard Oldworth	Tel:       [phone]

 

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