Virgin Australia says IPO planning advanced, finalising capital return

PLANNING for Virgin Australia’s upcoming initial public offering (IPO) is “well advanced”, chairman Ryan Cotton said on Wednesday (May 10) in an internal e-mail 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 US private equity firm Bain Capital will share a A$730 million (S$656.8 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 per cent followed by Richard Branson’s Virgin Group with 5 per cent and the rest going to the remaining shareholders, the source added.

A Virgin Australia spokesperson confirmed the contents of the internal e-mail. 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.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

The rewards to staff and shareholders come as Virgin Australia, the key domestic rival to Qantas Airways, 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 e-mail 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.

SEE ALSO

Qantas’ Hong Kong lounge reopens as international flights return

Australian competition watchdog blocks Qantas’ acquisition of Alliance Aviation

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 e-mail 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. REUTERS