When IAG -the air holding to which they belong Iberia, Vueling, British Airways, Aer Lingus and Level– it does not raise its head in the stock market with constant collapses in its price due to the coronavirus crisis, which has forced it to reduce your seat offer by 75% Over the next few months, some investors have expanded their stake in the company.
The first to do so was its main shareholder, Qatar Airways, which last February went from controlling 21.1% of the titles of the Spanish-British group to 25.1%. Now British funds have been added Lansdowne Partners International and Orbis Investment Management, which already had a significant stake in the airline and have now increased it to 4.59% and 2.19%, respectively. The rest of the majority shareholders are Americans: the manager Capital Research and Management (10.01%), and the funds Europacific (5.26%) e Invesco (2.05%).
This puts IAG in a delicate position in the eyes of Brussels, which is evaluating whether or not the holding company meets the requirements for operate in the European Union (EU) after Brexit consummated on January 31. Airlines must comply with the ownership and control requirements set by the European Commission, among which the mandatory nature of more than 50% of the company’s share capital is in community hands.
Veto foreign capital
The particular case of Iberia has raised several doubts, since economic rights are in the hands of IAG, of which the largest shareholder is Qatar Airways. For that reason, the company led by Willie Walsh imposed a restriction on non-EU shareholders in February 2019 for fear of a tough Brexit, but He finally raised it in January of this year, considering that his activity was safe.
According to the company, in early 2019 the level of ownership by people from outside the European Union had reached the 47.5%, while in January it stood at 39.5%. However, recent events would have fattened this percentage, being able to reach the limit established by the European Commission to maintain their operating licenses.
When asked about this matter, the company did not want to give details on whether will limit the inflow of non-EU capital againAlthough in January he assured that he would continue to monitor the percentage of shareholding of people who are not part of the EU, being able to impose the maximum allowed at any time. “
In its annual financial report submitted to the National Securities Market Commission (CNMV) a few weeks ago, IAG recognized that “could face difficulties “ behind the Brexit, because “the government structure implemented at the time of the merger contains a series of complex featuresIn this sense, he assured that “he will continue to dialogue with the competent authorities on the structure of the group.”
Companies now have a transition period until December 31, in which the trade agreements between the EU and the UK. In other words, for practical purposes, and although the airline does not comply with the regulations, at least until next year there will be no change in the airline’s operations. “We are convinced that we will comply with the regulations after the Brexit transition period,” he reiterates.