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UK airline upstart to float
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October 16, 2000: 10:39 a.m. ET
Low-cost carrier Easyjet sets long-awaited IPO, seeks $723M valuation
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LONDON (CNNfn) - British low-cost airline Easyjet Airline Co. on Monday announced it would stage its long-awaited initial share sale next month on the London Stock Exchange, aiming to raise an estimated $180 million to pay for new airplanes.
The "no-frills" airline owned by Greek entrepreneur Stelios Haji-Ioannou plans to sell 63 million ordinary Easyjet shares, which will represent 25 percent of the company's enlarged equity, to institutional investors.
The company, which started operating in 1995, did not place a value on the sale, though aviation analysts have estimated it will value the airline at about £500 million ($723.1 million), according to Reuters.
Competition in the European low-cost air travel market claimed its first victim last October, when U.K.-based Debonair sought court protection from creditors. The airline was grounded after British Airways PLC (BAY) and KLM Royal Dutch Airlines NV each started budget-priced subsidiaries airlines to stem the loss of passengers to companies such as Easyjet, Europe's most profitable airline Ryanair PLC and Richard Branson's Virgin Express.
"The flotation will enable us to finance the 32 brand-new Boeing 737-700s we have on order," Haji-Ioannou said in a statement. "Another equally important reason to float is to enable us to incentivise all staff, from Chief Executive to the youngest cabin crew member or reservation agent."
The shares will be priced on Nov. 14. Shares will start trading on a "gray market" on November 15 - this is where institutional investors can buy and sell shares before receiving their share certificates. Dealing in the issued shares begins on Nov. 22.
The airline also said it earned pretax profit of £22 million on sales of £263 million in the year ended Sept. 30, which Reuters said was roughly in line with expectations. Easyjet, Europe's second-largest low-cost airline after Ryanair, carried 5.6 million passengers in the year.
Easyjet and Ryanair model themselves on U.S. low cost carrier Southwest Airlines Inc. (LUV: Research, Estimates), regularly undercutting rival airfares and typically flying to less popular airports. 
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Easyjet
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