With aviation continuing to recover globally, Bain Capital, the current majority shareholder of Virgin Australia, is looking at options to re-list the airline on the Australian Securities Exchange (ASX).
“In the coming months we will consider how to best position Virgin Australia for continued growth and long-term prosperity,” said Mike Murphy, a Sydney-based Private Equity Partner at United States-based private investment firm, Bain Capital. Murphy reiterated that the firm wants to keep a “significant shareholding” following a future Initial Public Offering (IPO) of Virgin Australia.
Murphy did not provide an estimated timeline for the possible relisting. Bain Capital sent two requests for proposals to investment banks to list the airline, expecting to make appointments within a month, reported Reuters, citing two sources close to the matter. Furthermore, Reunion Capital Partners, a Syndey, Australia-based capital market advisory, was appointed as a financial advisor on the deal. It will designate the banks to head the IPO, continued the sources cited by Reuters.
Much like the rest of the aviation industry, Virgin Australia entered a financially turbulent period during the pandemic in 2020. However, it had struggled to be a profitable airline prior to COVID-19, with the carrier only managing to end a year profitably twice in the 2010s, once in 2010 and again in 2012. Virgin Australia entered administration in April 2020.
Bain Capital entered into an agreement with the carrier’s administrators to become a majority shareholder of Virgin Australia on June 26, 2020, and the airline began to restructure its operations. This included the removal of Airbus A320, A330, ATR-72, and Boeing 777 aircraft. The final price was set at $2.5 billion (€2.3 billion), in a deal that included the investment firm taking on the financial liabilities of Virgin Australia going forward.
Currently, Virgin Australia has 81 Boeing 737 aircraft in its fleet. It expects to receive its first Boeing 737 MAX-8 aircraft in H2 2023.