(Reuters) - Wizz Air Holdings Plc's (L:WIZZ) largest shareholder, private equity firm Indigo Partners, on Tuesday sold about 12.5 million shares of the low-cost airline at a 3.5% discount to the stock's last close, according to a bookrunner.
The sale, at a price of 4,015 pence per share, raised proceeds of about 500 million pounds.
Shares of Wizz Air were down 1.4% at 4,093 pence in early trading.
Indigo Partners will hold about 2.5 million shares in Wizz, an about 3.4% stake in the airline, after the sale is completed, keeping it among the top five shareholders.
The sale of Indigo shares could help Wizz Air's compliance with European Union shareholder rules following Britain's exit from the EU.
Airlines must be more than 50% owned by European Economic Area nationals to operate flights within the bloc, otherwise the rights of non-EEA shareholders have to be restricted to allow operations to continue.
JP Morgan, the bookrunner on the sale, said given Indigo's shares were not held by EEA nationals under EU rules, the share sale would "at a minimum, maintain Wizz's current level of EEA qualifying ownership, but more likely increase qualifying national ownership".
Before the sale, the Indigo Partners owned 20.6% of Wizz Air, which was worth about 624 million pounds based on Monday's close.
Veteran low-cost airline investor Bill Franke, the founder and managing partner of Indigo Partners, serves as the chairman of Wizz Air.
The share sale also comes just days after the European low-cost airline upgraded its annual profit forecast after a strong third-quarter performance when it carried more passengers.