Virgin Australia says IPO planning advanced, finalising capital return
Reuters
Published May 09, 2023 10:21PM ET
Updated May 10, 2023 12:11AM ET
By Scott Murdoch and Lewis Jackson
SYDNEY (Reuters) -Planning for Virgin Australia's upcoming initial public offering (IPO) is "well advanced", Chairman Ryan Cotton said on Wednesday in an internal email that also outlined bonus payments to the airline's shareholders and staff after a return to profit.
Cotton said Australia's second-biggest airline was days away from finalising a capital return.
Investors led by U.S. private equity firm Bain Capital will share a A$730 million ($495.16 million) payment, according to a source who was not authorised to speak publicly.
It will be structured as a capital reduction rather than a dividend, with Bain Capital taking around 90% followed by Richard Branson's Virgin Group with 5% and the rest going to the remaining shareholders, the source added.
A Virgin Australia spokesperson confirmed the contents of the internal email. A Bain Capital spokesperson declined to comment.
The airline had sought up to A$450 million of loans for the capital return, Reuters reported in March.
The rewards to staff and shareholders come as Virgin Australia, the key domestic rival to Qantas Airways Ltd, prepares for what is likely to be one of the country's biggest listings this year.
"I can also confirm the IPO planning is well advanced," Cotton said in the email to staff seen by Reuters.
"While there is still no date set and our ultimate window of opportunity will depend on market conditions, we are hopeful this process will progress over the coming quarters," he added.
Virgin Australia Chief Executive Jayne Hrdlicka said on Monday that she would take several weeks of leave to spend time with family after the death of her husband from cancer.
In an email drafted before her departure that accompanied Cotton's, she said the payments to staff and shareholders reflected the "monumental feat" of returning the airline to profitability for the first time in more than a decade.
Bain Capital bought Virgin Australia in 2020 after it was placed in voluntary administration, the closest Australian equivalent to Chapter 11 bankruptcy.
($1 = 1.4743 Australian dollars)
Get The News You Want
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.