SIA says it is not seeking majority stake in Virgin Australia

Virgin Australia plane taking off from Sydney Airport.
Virgin Australia plane taking off from Sydney Airport. PHOTO: AFP

Singapore Airlines has said that it has not considered taking a majority stake in Virgin Australia.

This follows reports that it was moving towards securing a 51 per cent stake in the Australian carrier.

In a statement yesterday, the airline said: "SIA wishes to put on record that it has not contemplated taking a majority stake in Virgin Australia.

"SIA's interests in the Australian market - as well as in Virgin Australia itself - are best served through an independent Virgin Australia."

Research firm Centre for Aviation (Capa) had said earlier this week that SIA had missed the opportunity to take control of Virgin Australia after it was blindsided by Virgin's tie-up with Chinese conglomerate HNA Group.

"That no longer seems a realistic option and perhaps puts an end to SIA's longstanding aspirations to own a dominant minority of the Australian market," Capa had said.

Earlier, Virgin - Australia's second-biggest airline - had said it was selling a 13 per cent stake to HNA, which the group is expected to top up to 19.99 per cent.

While refuting the claims yesterday, SIA also reiterated that it is committed to taking up its entitlement in Virgin Australia's A$852 million (S$862 million) equity raising, in which Virgin is offering existing investors one share for every one they already hold at 21 Australian cents.

This could increase SIA's shareholding from 20.09 per cent to a maximum of 25.9 per cent, should other Virgin Australia shareholders not take up their entitlements.

"SIA is confident of the long-term prospects of Virgin Australia and is committed to supporting its long-term growth," it said.

The other shareholders supporting Virgin Australia's offer include Sir Richard Branson's Virgin Group, Chinese conglomerate HNA Group and Nanshan Group.

Samantha Boh

A version of this article appeared in the print edition of The Straits Times on June 25, 2016, with the headline 'SIA says it is not seeking majority stake in Virgin Australia'. Print Edition | Subscribe