Having overcome myriad challenges during 2020, the company secretarial team at easyJet are deserving winners of the 2021 CGIUKI Team of the Year Award.
The COVID-19 pandemic, fleet grounding, cyber incident, public dispute with the founder/major shareholder, four general meetings – three in lockdown – equity placing, numerous board changes, over 100 virtual board meetings, Brexit, a rights issue, a takeover approach …
It could be the script from a political thriller, but this was the reality for easyJet’s small company secretarial team over the last two years.
Just before the pandemic hit in 2020, easyJet was heading towards one of its most successful years. It started with approving the new sustainability strategy – a very positive step – and, in so doing, easyJet became the world’s first major airline to offer carbon neutral flights by offsetting the carbon emissions from fuel and operations. The company also successfully launched easyJet holidays, which was well received by customers.
Then, at break-neck speed, they moved from growth mode to survival mode when the COVID-19 pandemic hit. Unfortunately, during this time easyJet also experienced a cyberattack on their systems from a highly sophisticated source.
The pandemic had an unprecedented impact on easyJet and the wider airline industry. The entire easyJet fleet was fully grounded for 11 weeks in spring 2020. The company secretarial team was at the heart of this pivot – supporting the board and working across the entire company to help facilitate quick decision-making to secure the future of the business in one of the most challenging times the organisation had ever experienced.
What happened?
COVID-19 travel restrictions, fleet grounding and cyberattack
The restrictions on travel imposed by governments in response to COVID-19 had a devastating impact on air travel. This meant the immediate priority for easyJet’s board was to act quickly and decisively to reduce costs, including grounding the entire fleet for almost three months as well as deferring aircraft orders and securing additional liquidity through various financing initiatives and an equity placing.
The company secretarial team was in the thick of it. At the outset, they were focused on ensuring the board and Airline Management Board (AMB) were equipped with the right information at the right time, to make the right decisions for the company. This necessitated frequent board meetings and linking numerous stakeholders across the business to obtain succinct and purposeful papers that were timely and gave the AMB and board the critical information. The team had to switch from in-person meetings to digital – initially telephone conference facilities, then Skype, then Microsoft Teams in quick succession.
The company secretarial team also helped to set up smaller subcommittees of the board to review and approve easyJet’s financing activities given the focus on liquidity, in addition to creating a working group of board members who met frequently to manage the response to the cyber incident.
Besides making sure the right parts of the business were providing the information required – not easy when everyone was in crisis mode and mostly working from home – the company secretarial team had to manage a number of external stakeholders: lawyers, brokers, proxy solicitation agents, registrars and banks, to name a few. In the background, the team was pulling together, being clear on their purpose, supporting each other by stepping in to help where needed and maintaining that all important sense of humour – embodying easyJet’s famous ‘orange spirit’ and putting people first. All this while under the pressure of doing things ‘yesterday’ and amidst constant change.
Public dispute with easyJet’s founder and largest shareholder
Sir Stelios Haji-Ioannou, easyJet’s largest shareholder and founder, initiated a public dispute with the board in April 2020. This began with requisitioning a resolution to remove one director and ended with a GM in May 2020 – the team’s second that year – to consider the removal of four board members: the chair, CEO, CFO and an independent NED. The board had to switch into defence mode and the company secretarial team was instrumental in responding to the challenge. They organised a GM early in the first lockdown, incorporating live voting, a question and answer session via telephone and live video streaming. It was one of the first of its kind to be held in lockdown, taking place just before the temporary legislation on GMs had been enacted. Under threat of litigation, getting this right was paramount. The team led the proxy solicitation exercise which was critical to gaining investor support. Not only was it successful, with all four resolutions defeated, but the GM was delivered seamlessly – the technology worked! – allowing the board to return to managing its response to a global crisis.
Disenfranchisement
easyJet had been well prepared for the end of the Brexit transition period on 31 December 2020, and has been operating in a ‘no deal’ Brexit environment since March 2019.
Since then, easyJet has been structured as a pan-European airline group with three airlines based in Austria, Switzerland and the UK. This meant that easyJet could continue to operate flights both across the EU and domestically within EU countries after the end of the transition period, irrespective of any future agreement on aviation matters between the EU and UK being in place.
To allow continued flying within Europe after the end of the transition period, easyJet was required to ensure ongoing compliance with European ownership and control requirements. If easyJet’s level of EU ownership remained below the required level of 50% plus one share at the end of the transition period, the board was ready to activate the existing provisions in easyJet’s Articles of Association which allow them to switch voting rights off for certain shareholders to ensure continued compliance with European regulations relating to intra-EU flying.
As is often the case, delivery of a simple outcome involved a hugely complex process in practice, and the company secretarial team had to deliver another hybrid GM in December 2020 – prior to the end of the transition period – to allow shareholders to engage with the board. The team was front and centre in designing and implementing the disenfranchisement process which became effective in January 2021 – the last thing any company would want to do.
Multiple board changes
Since August 2020, five longer serving members of the board have stepped down and four new board members have been appointed, including a new chair designate in September 2021. This involved extensive recruitment and required comprehensive induction programmes to be undertaken during lockdown. These were successfully delivered by the company secretarial team with positive feedback. The inductions were rated as ‘excellent’ in the subsequent board evaluation.
Rising to the challenge
Liquidity
easyJet has taken swift and decisive action to raise cash from a diversified range of funding sources since the beginning of the COVID-19 pandemic. They entered into £1.4 billion worth of aircraft sale and leasebacks, a £1.4 billion UKEF facility, a £1 billion bond issuance, £0.6 billion CCFF facility and a £0.4 billion term loan. All of these transactions needed active management by the company secretarial team – from working with advisers, to board approval and implementation.
Equity placing
easyJet consulted with a number of its major shareholders prior to the equity placing announced on 24 June 2020, taking account of the statements issued by the FCA and the Pre-Emption Group in relation to targeted equity issuances during COVID-19 and the use of ‘soft pre-emption’. The placing was structured as an accelerated bookbuild to minimise execution and market risk. The board applied the principles of pre-emption when allocating the placing of shares to those investors that participated.
The company announced the successful placing of new equity on 25 June 2020, receiving commitments from its existing shareholders and new investors for the issuance of 14.99% of existing issued share capital. Of the 14.99%, 5% was conditional on approval at a GM held on 14 July 2020 – the third GM of 2020 – where 99.8% of the votes cast by independent shareholders were in favour.
Not only did the company secretarial team organise multiple board and subcommittee meetings to ensure the right information was presented at the right time, but they also organised another successful GM in lockdown.
Rights issue
In September 2021 the board undertook a rights issue, raising £1.2 billion to facilitate the group’s recovery from the impact of the pandemic and to materially improve easyJet’s ability to deliver long-term value to shareholders by providing the group with the flexibility to take advantage of strategic and investment opportunities.
The rights issue had a take-up rate of over 93%, which was an indication of the market’s confidence in the financial strength of the company.
The company secretarial team managed the entire process, from liaising with lawyers, advisers, brokers and the board and AMB, to the implementation and post-rights issue procedures, once again providing the right information to help decision-making and complying with the various legislative and regulatory requirements.
Wellbeing
Amidst the outbreak of COVID-19, it was inevitable that people would feel anxious or distressed about what the future held. The team managed to keep themselves energised by looking after their safety, health and wellness. Everyone managed this differently, but one of the things the team did was to block an hour in their diaries every day for exercise, yoga or anything that would help them to recharge. The company secretarial team is part of a wider GCO team which also organised virtual social activities, encouraged ‘walks and talks’ and arranged regular virtual coffee and chat breaks. As a team they made sure to stay in touch as each person had different challenges; they made sure that they had each other’s backs and worked together. The team’s positive ‘orange spirit’ got them through.
The future
easyJet is in a strong position, having navigated some stormy waters. While the future is still uncertain, easyJet’s unique and established position in the industry and strong financials have put it in a great position to drive shareholder returns. All of the above are just the headlines; it’s not possible to list everything that happened in one short article! Throughout it all though, easyJet’s company secretarial team was at the heart of things – demonstrating pragmatism, pace and resilience, working closely with business colleagues, corralling external advisers and supporting the board to achieve the best possible outcomes for the company. Leadership and clarity of purpose were at the foundation of the team and the fact that everything was delivered successfully is a testament to how they performed during the last two years.
It has been such a roller coaster since 2020, but the team is now more experienced than ever, having accomplished such a huge range of things in just two years. Who could have predicted the need to organise more than 100 board and board committee meetings in one year and minute them – the hard part – or to organise multiple hybrid GMs!
As a result of the pandemic, the team has learned to be more proactive and to think strategically, it has also given them confidence that they can get through anything. The good news is that people want to travel again now that restrictions have been lifted, to create wonderful memories, by going on holiday and visiting friends and family. And that’s something that the company secretarial team also enjoy; the team has managed to go on a couple of holidays themselves and one of them has even managed to get married! All part of the life in a small company secretarial team navigating through some serious headwinds.
Ben Matthews FCG, Deputy Company Secretary, easyjet
Jennifer Powell, Company Secretarial Assistant, easyjet
Maaike de Bie, Group Company Secretary and General Counsel, easyjet
Sruti Bajoria FCG, Senior Assistant Company Secretary, easyjet
