Reuters reported that the term sheet indicates the IPO will be for A$685 million (approximately US$442.8 million). Bain will sell about 30 per cent of the airline – 236.2 million shares – at a price of A$2.9 (US$1.87) per share. The pricing of the shares values the company at A$2.32 billion on a fully diluted basis.
Virgin Australia IPO plans
Virgin will have an enterprise value of A$3.6 billion (US$2.33 billion), taking into account its net debt of A$1.31 billion (US$850 million).
According to the term sheet seen by Reuters, Bain’s shareholding will drop from about 70 per cent to 39.4 per cent following the sale, while Qatar Airways will retain a 23 per cent stake.
Institutional bookbuilding will close on Thursday, and Virgin’s shares are due to start trading on the Australian Securities Exchange (ASX) on June 24.
Bain declined to comment on the plan.
In September 2020, the Boston-based private equity group acquired the airline for A$3.5 billion (US$2.26 billion) after it fell into administration following the COVID-19 pandemic. The effect was severe in a country like Australia, which had tough restrictions for nearly two years.
Virgin Australia has been extremely strong in the domestic market, where it now holds a 34.4 per cent share (compared to 37.5 per cent market share of Qantas). The Qatar Airways partnership and stake will support its long-haul plans, thus making the IPO a very interesting proposition for investors.
The deal will be the largest IPO in Australia this year after DigiCo Infrastructure REIT raised A$2 billion in December. DigiCo’s shares have traded down about 30 per cent since debut.
