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Intellasia East Asia News – Virgin Australia says IPO planning advanced and return of capital finalized

Planning for Virgin Australia’s upcoming initial public offering (IPO) is “well underway,” Chairman Ryan Cotton said Wednesday in an internal email that also outlined bonus payments to airline shareholders and staff after a return to earnings.

Cotton said Australia’s second-biggest airline was days away from finalizing a capital return.

Investors led by US private equity firm Bain Capital will share a payment of A$730 million ($495.16 million), according to a source who was not authorized 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 content of the internal email. A Bain Capital spokesman declined to comment.

The airline had sought up to A$450 million in loans for capital repayment, Reuters reported in March.

The rewards for staff and shareholders come as Virgin Australia, the main domestic rival of Qantas Airways Ltd (QAN.AX), prepares for what is likely to be one of the biggest listings in the country this year.

“I can also confirm that planning for the IPO is well advanced,” Cotton said in the email to staff seen by Reuters.

“While there is no set date yet and our last window of opportunity will depend on market conditions, we are hopeful that this process will move forward in the coming quarters,” he added.

Virgin Australia chief executive Jayne Hrdlicka said on Monday she would be taking several weeks’ leave to spend time with family after her husband’s death from cancer.

In an email written before his departure that accompanied Cotton’s, he 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 into voluntary administration, the closest Australian equivalent to Chapter 11 bankruptcy.

($1 = 1.4743 Australian dollars)

Category: Regional

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