Virgin Australia IPO Heavily Subscribed, Set to Relist in June

Virgin Australia is set to relist on the Australian Securities Exchange (ASX) by June 26 under the ticker VGN, following strong investor interest in its AUD 685 million (USD 446 million) initial public offering. Institutional investors have heavily subscribed to the IPO, which will reduce Bain Capital’s controlling stake from 70.2% to 40%.

The offering is backed by factors including strong domestic travel demand, a buoyant Qantas share price, and Virgin Australia’s strategic alliance with Qatar Airways. Investors responded positively to the airline’s leadership team, led by CEO Dave Emerson, CFO Race Strauss, and Velocity loyalty chief Nick Rohrlach.

The IPO will price shares at AUD 2.90 (USD 1.89), representing roughly seven times Virgin Australia’s projected FY2025 earnings, and at a 30% discount to Qantas’ valuation. Virgin expects underlying EBITDA of AUD 1.08 billion (USD 700 million) for the year ending June 30.

Bain Capital, which acquired Virgin Australia out of voluntary administration in 2020 for AUD 700 million, will remain the largest shareholder. It has already recouped over AUD 1 billion through a capital return and a 23% stake sale to Qatar Airways in 2023. Bain has agreed to retain its post-IPO stake until at least June 2026.

Following the IPO, Qatar Airways will hold 23.4%, management and staff will own 6.4%, and Bain and partners will retain 40%. Former CEO Jayne Hrdlicka, who helped prepare the airline for the float, is expected to benefit from retained shares. Bidding for shares closes on June 7.

Related News: https://airguide.info/category/air-travel-business/airline-finance/

Sources: AirGuide Business airguide.info, bing.com, ch-aviation.com