Virgin Australia has kicked off its return to the Australian sharemarket after an absence of more than four years, with bankers offering shares in the airline to investors at $2.90 apiece for its much-anticipated re-listing on the ASX.
Private equity owner Bain Capital will sell about 30 per cent of Qantas Airwaysโ biggest rival, expecting to raise $685 million via the initial public offering. The $2.90 price tag for the stock represents a multiple of seven times the airlineโs expected earnings this financial year, the firm said in its pitch to sharemarket investors.
Virgin Australiaโs IPO is ready to take off.Credit: Bloomberg
Market sources said the joint lead managers of the offering – Goldman Sachs, UBS and Barrenjoey – believed demand from domestic and global anchor investors was โwell in excess of the offer size prior to opening of the bookbuildโ.
The IPO represents the culmination of years of waiting for the listing of the airline. Bain Capital bought the then struggling carrier in 2020, taking it off the sharemarket after it had been placed in administration, facing soaring costs and the impact of the COVID-19 shutdown on travel.
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In October, Bain sold 25 per cent of Virgin to Qatar Airways. Under their agreement, Virgin will begin offering expanded international flights using Qatar planes and crews to fly from capital cities to Doha later this month.
The IPO is expected to reduce Bainโs 70.2 per cent stake in Virgin to 40 per cent. Qatar will own 23.4 per cent, the airlineโs management will own 6.4 per cent, and the remaining 30.2 per cent will be owned by the new sharemarket investors.
Fund managers have until Thursday afternoon to make their bids for the shares, while bids from brokers for retail investors are due by Friday morning.
Virginโs shares are expected to start trading on the ASX on June 26 under the proposed ticker VGN.
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