Sir Stelios and Rubicon explore African airline
The founder of EasyJet is proposing to study establishing a low-cost airline in Africa with a company that has links to Lonrho, the pan-African conglomerate that has significant aviation interests.
Sir Stelios Haji-Ioannou, whose family is EasyJet's largest shareholder with a 38 per cent stake, is preparing to work on a feasibility study for a new African airline with Rubicon Diversified Investments, an investment company that once specialised in computer software.
In September, Sir Stelios shocked the aviation world when EasyJet, Europe's second-largest low-cost airline by revenue, announced it had been informed by him that he was planning to set up a new carrier.
No details about the airline were given at the time, other than it would have the brand name Fastjet, but the disclosure highlighted an acrimonious and protracted dispute between Sir Stelios and EasyJet over strategy.
On Monday, Rubicon said it had entered into a conditional agreement with EasyGroup, Sir Stelios' private investment vehicle, to collaborate on a study for a low-cost African carrier.
Rubicon's shareholders will be asked to approve the agreement on December 13. Robert Burnham, chairman, said: "We are very pleased to have secured the management team of EasyGroup to advise us on our proposed strategy of building a world class aviation company with a focus on the significant potential of Africa."
Sir Stelios said: "I am looking forward to being part of this new venture to bring low-cost air travel to the people of Africa."
Under the conditional agreement between the two companies, Rubicon would issue shares to EasyGroup that initially amount to a 5 per cent stake.
EasyGroup would then have the option to subscribe for an additional 10 per cent stake in Rubicon. The amount EasyGroup would pay for the Rubicon shares has not been disclosed.
EasyGroup would also receive royalty fees from Rubicon over 10 years for use of the fastjet.com brand.
Rubicon is planning to pay £480,000 to EasyGroup over the next six months for a team of aviation executives led by Sir Stelios who will work on the feasibility study.
David Lenigas and Geoffrey White, chairman and chief executive of Lonrho, are due to join Rubicon's board if the company's shareholders approve the move on December 13.
Lonrho already has significant aviation interests. It controls an African airline called Fly540 that operates from hubs in Angola, Ghana and Kenya.
Lonrho is due to secure a 12.7 per cent stake in Rubicon after participating in a share placing that raised £400,000 for the company last month.
Sir Stelios and Lonrho already have a commercial partnership. In July, Lonrho signed an agreement to use Sir Stelios' EasyHotel brand for a network of 50 hotels operated by the conglomerate across Africa by 2016.
Since Rubicon's flotation in 2006, the company has never achieved a pre-tax profit, and in July it announced it was selling its software business and considering alternative investment plans. It has a market capitalisation of £3.5m.
EasyJet declined to comment on Monday. In September, EasyJet signalled it was prepared to go to court to enforce a deal, reached last year, under which Sir Stelios agreed not to use his own name "or a derivation of it" to brand any airline which flies to or from any European country for five years.
Sir Stelios said in September he had terminated the agreement, claiming that EasyJet's directors had breached its provisions. EasyJet denied flouting the agreement.
By Andrew Parker and Arash Massoudi
