Play Offers Investors 70 Percent Stake
Founders and directors of the new Icelandic airline Play are ready to reduce their proposed stake in the company from 50 to 30 percent, Fréttablaðið reports. Investors willing to contribute ISK 1.7 billion (USD 13.9 million; EUR 12.6 million) would in turn get a 70 percent stake in Play.
Providing funding for the new company has proven challenging. Prior plans assumed that investors obtained a 50 percent stake and the founders the other 50 percent. Potential investors have voiced their opposition to a 50-50 deal at meetings with the founders.
Offering investors a 70 percent stake is Play’s way of meeting investors’ wishes. The original plan was to begin ticket sales by the end of November, but Play posted on Facebook last weekend:
“As we are a startup company, things can sometimes take a little longer than planned as there are many tasks to finalize. Our original plan was to start selling tickets in November, but unfortunately, we must delay that a little longer.”
Fréttablaðið reported earlier that investors had expressed interest in providing the airline with a total of ISK 700-800 million. That interest, the paper now reports, is dependent on a lead investor taking part in the stock offering.
Besides, investors have expressed the view that the founding team has limited experience operating an airline and that Play’s business plan is in many ways unrealistic. The founders expect Play to return a profit of ISK 70 million (USD 574,000; EUR 518,000) during the first quarter of next year.
Funding from the British fund Athene Capital and an air operating license from the Icelandic Transport Authority are dependent on Play’s ability to obtain ISK 1.7 billion in stock.