Virgin Australia returns to the stock market with the launch of $ 443 million in public subscription

Written by Scott Murdoch

(Reuters)-Virgin Australia is scheduled to return to the stock market after a five-year absence, as the capital-owned airline has launched a first public offer of $ 685 million ($ 443 million) on Wednesday amid a recovery in local tourism.

This offer, the largest in Australia for this year so far, will witness a decrease in the Bain share to 39.4 % of about 70 %, while Qatar Airways, which recently bought to the airline, will retain 23 %, according to the dental paper that Reuters deexes.

It is one of the most closely seen deals in Australia years, where a successful list will be considered as a vote on confidence in the horizons of extreme recovery in consumer spending in the country.

The shares will be offered at a fixed price of $ 2.90 per share, the term sheet has shown, and the company’s evaluation of $ 2.32 billion on a fully diluted basis.

Bain, who bought Virgin for $ 3.5 billion, including obligations, refused to comment on the details of the deal shown in the term paper.

The American private stock company acquired the airline in 2020 after it entered the volunteer management, and strongly struck the travel restrictions caused by Covid.

The beginning of auspicious

The prospects look good for successful public subscription.

Bookrunner’s message on Wednesday showed that investors have made offers by Virgin before starting books construction that would cover the size of the deal.

Also, the demand for local travel recovers, with the help of two recent discounts in interest rates. This, in turn, contributed to trading the rival Qantas competitor. ASX200 is also traded in Australia near the peak reached in February.

As part of her efforts over the past few years, Virgin has reduced her international works. But long trips are scheduled to resume through its partnership with the state -owned Qatar. Airlines plan to 28 new weekly return services between Doha and the major Australian airports.

In March, 5.1 million passengers were implemented on local commercial airlines in Australia, official figures indicate. This is a slight decrease in the past year, but more than four times more than Covid’s peak in mid -2011.

“The continuous, strong domestic demand, slow growth capacity and low competition in the local market, also benefited from the revival of Virgin Australia,” said Simon Engoud, head of research at the Kapa Aviation Center.

He pointed out that Bonza and Rex competitors in the main aircraft market did not benefit from Virgin and Qantas.

Virgin has a 34.4 % local market share as of March, not behind Gantas, which had 37.5 %, according to the Australian Competition and Consumer Committee report.

The general subscription of the airline is implemented through the process of building the front books, which means that investor bids are taken before reviewing the release bulletin and approved by the Australian organizers.

Institutional investors will be allowed to make their offers for shares until Thursday, and the stock is scheduled to start trading on June 24.

The deal will be the largest subscription in Australia since Digico has gathered the Rit $ 2 billion in December. Digico shares are trading about 30 % since they appeared for the first time in the market.

($ 1 = 1.5470 Australian dollars)

(Skot Murdoch reports in Sydney: Additional reports by Lisa Parington in Seoul and the Chashgi Chochsi in Bangaluru; edited by Sumit Chattage and Adena Gibbs)