Virgin Australia to relist on australian stock market marking major recovery

Virgin Australia is set to return to the Australian Stock Exchange five years after collapsing into administration. The airline, founded by Sir Richard Branson, plans to relist with a valuation of A$2.32 billion (£1.2 billion). This landmark flotation signals a significant step forward for the aviation and tourism industries, particularly after the turbulence of the pandemic.

Bain Capital, the US private equity group that purchased Virgin Australia in 2020 during the height of the Covid-19 crisis, currently holds a 70 per cent stake in the airline. Upon relisting, Bain’s stake will reduce to 39.4 per cent, with the Qatari state-owned Qatar Airways retaining a 23 per cent share. Shares will be offered at a fixed price of A$2.90 each, according to a term sheet.

Virgin Australia’s collapse in 2020, amidst the shutdown of global tourism, made headlines as one of the highest-profile corporate failures of the pandemic. The company entered administration after neither the Australian government nor shareholders agreed to a bailout, leaving Bain Capital to acquire it for A$3.5 billion, including liabilities. The restructuring enabled the airline to endure drastic decisions, with its then-owner Richard Branson relinquishing a portion of his empire to save Virgin Atlantic during the same period.

Branson, who holds a private stake in Virgin Australia, expressed his enduring affection for the airline in 2023, praising its recovery journey while reflecting on the challenges of the pandemic years. His Virgin Atlantic rescue deal in the UK, which saved thousands of jobs, had involved selling £550 million worth of shares in Virgin Galactic, along with a major financing package.

As Virgin Australia focuses on long-haul flights again, aided by its partnership with Qatar Airways, the airline is regaining market share domestically. Recent reports indicate its share now stands at 34.4 per cent, closing in on market leader Qantas, which has 37.5 per cent. The relisting represents not only a financial recovery but also a strong vote of confidence in the future of Australia’s aviation sector.

This float is the largest in Australia this year, and the shares are planned to begin trading on the 24th of June. Virgin Australia’s revival will further solidify its role as a key competitor in both domestic and international markets.