Ryanair drops London Stock Exchange listing because of Brexit

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Ryanair drops London Stock Exchange listing because of Brexit

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Irish discount carrier Ryanair Holdings Plc said it would drop its London Stock Exchange listing, becoming the first major company to blame its departure on Brexit.

The move confirms a plan set in motion this month, when Ryanair cited compliance headaches related to Britain leaving the European Union.

The region's biggest low-cost airline has had to limit stock purchases in order to ensure it is controlled from within the EU, then police investors who ran afoul of the guidelines. The company hasn't managed to steer enough traffic to its main listing in Dublin, despite the fact that trading volumes in London have dwindled.

Ryanair has decided to request the cancellation of London listing, as indicated at our interim results, and following subsequent shareholder engagement. The volume of trading of the shares on the London Stock Exchange does not justify the costs. Ryanair shares were 0.4% lower as of 8: 18 a.m. in Dublin. The stock is down 0.6% this year, the best performance on the six-member Bloomberg EMEA Airlines Index, which averages an 11% decline.

Ryanair is one of many companies that have disappeared from the London stock market, but Ryanair is the first to explicitly cite Brexit. Europe's largest discount carrier has its largest operation at London Stansted, which won't be affected.

Airline ownership rules set decades ago to protect the industry in Europe add a layer of complexity to the divorce that took effect at the beginning of this year.

With Brexit, U.K. nationals don't qualify anymore because EU-based carriers must be owned and controlled from within the bloc.

After taking several steps to limit non-EU ownership, just over one-third of Ryanair's shares are held by member states, Chief Executive Officer Michael O Leary told Bloomberg TV earlier this month. He said that the Dublin-based carrier needs to take additional steps to bring the total to over 50%.

O Leary said that it was an inevitable consequence of the Brexit. Delisting from London is a small initiative in that strategy, and we must be EU-owned and controlled. In other ways, the LSE has been put under pressure because of Brexit.

London's stock market is shrinking at one of the fastest growth among global listing centers, with U.K. equities trading at a discount to global indexes. A wave of acquisitions by foreign buyers and private equity houses has been a result of cheap valuations and a flood of buybacks.

A number of big names are leaving the market, including BHP Group, the second-biggest stock on the U.K. FTSE 100 Index by market value. The mining giant is moving to a primary listing in Australia after a dual arrangement that dates back to the company's creation two decades ago.

The UK's commercial landlord Hammerson Plc and the warehouse group Segro Plc have been forced to seek secondary listings on EU exchanges to keep access to the wider market because of the Brexit.

Royal Dutch Shell Plc and Unilever Plc have left the Netherlands, ending dual headquarters arrangements to settle in the U.K.

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