Low-cost airline Ryanair is to raise up to £100 million (€127 million) through a new share placing of 14.3 million shares in the company. The revenue will be used to buy more aircraft.

Ryanair chief executive Mr Michael O'Leary is selling five million shares, which will net him around £32.5 million. In total the company is placing 5.8 per cent of its issued share capital. The shares will be priced on Thursday evening and are not being offered in the US.

In Dublin Ryanair shares closed at €8.35 (£6.58) yesterday, down from €8.91. The shares were also down almost 10 per cent on the Nasdaq late yesterday.

Ryanair chief financial officer Mr Howard Millar said "this is to be expected when you have an offering". He added that Ryanair's share price had been rising steadily in recent weeks.

The placing will be targeted at institutional investors in Ireland, Britain and the rest of Europe. There is also provision for a further two million shares to be placed - one million by Mr O'Leary and one million by the company, depending on demand.

Mr Millar said the monies will be used to help finance 10 new Boeing 737-800 aircraft, five of which will be delivered in May and June. The company is introducing eight new routes from Britain, including three to Italy and one to Germany.

Mr Millar said some cash may also be used to buy second-hand aircraft. He said as airlines, mainly larger state-owned operators, are switching from Boeing to Airbus aircraft, a number of aircraft are becoming available, adding that the company was beginning its fleet renewal programme this year. By 2001, he said, the company would have 36 aircraft.

Mr Millar said the monies may also be used to pay down debt. He said the company would also be accelerating the development of its website, which was launched in the second week of January. "The website is attracting 25-30 per cent of our business some days," he said, "and up to 50 per cent on other days."

The company has claimed that its website generated more than 24 million hits last month and the current rate of bookings is about 50,000 seats per week.

Chief executive Mr O'Leary said the company intended to make it the largest air travel website in Europe. "The successful combination of Ryanair's unique low fares and our marketing strength will, we believe, enable us to maintain our significant rate of growth at a time when most of our competitors - be they flag carriers or low fare carriers in Europe - are cutting back their growth or consolidating."

From next month Ryanair is reducing its commissions to travel agents from 7.5 per cent to 5 per cent on the tickets they sell. It is the second time Ryanair has reduced travel agents' commission.

Mr Millar said the company wanted to retain travel agents. "We still see travel agents as a good way to distribute tickets, provided they do so at the right price - at a price comparable to our distribution costs," he said.

He said the airline's call centre business - Ryanair Direct - which takes telephone bookings would not be cut back because of the website business.