Join our daily newsletter At The Bell to receive exclusive market insights
Virgin Australia has been given the thumbs up to hit the ASX runway again, with the returning airline now only needing to head through a $685 million raising before it hits the trading wire before the end of the month.
Listen to the HotCopper podcast for in-depth discussions and insights on all the biggest headlines from throughout the week. On Spotify, Apple, and more.
The airline was originally on the ASX through to 2020 before the COVID-19 pandemic rocked the flight company and forced it into administration.
Bain Capital saved Virgin at the time, bringing it out of administration. The plan since then has always been to bring it back into the trading fold eventually, with Bain even trying something similar to this IPO in 2023. (It was shelved.)
Now — Virgin will end its time in the cold on June 24, returning after five years.
HotCopper expects it will relist under its old ticker code, “VAH.”
The returning Australian company will land with a market capitalisation of $2.3 billion and an enterprise valuation of $3.6 billion, the Australian Financial Review reported.
Intriguing numbers have already been flying behind the scenes too, with fund managers told the airline should bank as much as $1 billion in underlying earnings for the year ending June 30 – a clear carrot for potential investors.
There won’t be long to think for anyone wanting to get in through raising; HotCopper understands bids are due in by as early as this Thursday, June 5.
Goldman Sachs, UBS, and Barrenjoey have already underwritten the IPO.
Retail investors will then get a bite at Virgin’s return on that aforementioned June 24 re-float date, though this HotCopper writer wonders how many will board.
Not that Virgin as a company isn’t an appealing offer — but instead, some may have been stung by the fact they were given the chance to buy into the company in 2019, only to watch it all come apart at the seams a year later.
We’re not expecting another pandemic, but cost of living isn’t getting any easier.
More market news
Forget U.S. tariff talk: Aussies just got a worrying signal from the ABS
Meet GeoGeorge: The HotCopper poster so accurate he got hired as an analyst
Bain Capital seems to have somewhat acknowledged this with its return plan: Retail investors will get to buy into a slice expected to be around $700 million — à la Guzman Y Gomez (ASX:GYG) last year — while the rest of the IPO has already been “covered at launch” by brokers working behind the scenes.
Virgin’s selling pitch was also pointedly aimed at proving the airline has been deleveraged since its COVID-19 collapse. At very least, its profits have turned skyward again under the now-departed Jayne Hrdlicka, who left for Endeavour in April.
The IPO has yet to be added to the ASX’s quite sparse floats docket, at time of writing.
Join the discussion. See what HotCopper users are saying about Virgin Australia and be part of the conversations that move the markets.
The material provided in this article is for information only and should not be treated as investment advice. Viewers are encouraged to conduct their own research and consult with a certified financial advisor before making any investment decisions. For full disclaimer information, please click here.
