FL Group announced yesterday the sale of its 16.9% stake in easyJet for approximately ?325 million ($395.9 million), earning Icelandair's parent company some ?140 million in profit from its initial investment and representing an annual return of 70%, "far surpassing" the 20% target. JPMorgan was the sole bookrunner and JPMorganCazenove was joint lead manager. FL Group said the proceeds will be "channeled into new investments during 2006." It now has liquid assets of about ?600 million.

Separately, FL Group exercised purchase rights for two additional 787-8s on behalf of Icelandair. Delivery is scheduled for spring 2012. Aircraft are worth approximately $290 million at list prices and will be powered by Trent 1000s. Icelandair will take delivery of its first two Dreamliners in 2010.

FL said easyJet has "great prospects" and made clear that the sale was "primarily due to other investment opportunities." It has been investing in nonaviation companies since its November 2005 equity offering. However, CEO Hannes Smarason said, "The sale...does not affect our other investments in the aviation sector and we remain committed to our investments in Icelandair, Sterling and Finnair." The group also announced it increased its share in Finnair to 10%.