Bain Capital explores Virgin Australia IPO as aviation market improves
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A listing of the country’s second-biggest airline would likely be one of Australia’s largest IPOs in 2023.
PHOTO: REUTERS
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SYDNEY – Bain Capital said on Monday it was looking to relist Virgin Australia, a move that came as the domestic aviation market bounced back strongly from its pandemic lows.
A listing of the country’s second-biggest airline would likely be one of Australia’s largest initial public offerings (IPOs) in 2023 after capital market activity plunged last year amid global financial market uncertainty.
“In the coming months, we will consider how to best position Virgin Australia for continued growth and long-term prosperity,” Mr Mike Murphy, a Sydney-based partner at the United States private equity firm, said in a statement.
“It is Bain Capital’s current intention to retain a significant shareholding in a future IPO of Virgin Australia.”
Bain said it would seek advice on the best timing and structure to return the airline to the Australian Securities Exchange, but added that no decisions had been made as to if and when that would happen.
It sent a request for proposals on the listing to investment banks on Monday and expects to make appointments within a month, according to two sources with direct knowledge of the matter who were not authorised to speak to media.
Bain bought Virgin Australia for A$3.5 billion (S$3.2 billion), including liabilities, in 2020 after the airline was placed in voluntary administration. Creditors approved the buyout in September 2020.
Aviation market conditions have improved substantially since then after Australia’s state and international borders reopened. Virgin has also rebuilt its Boeing 737 fleet to around the same size it was before the pandemic.
The potential listing comes as rival Qantas Airways is poised to post a first-half underlying profit of between A$1.35 billion and A$1.45 billion next month, a sharp turnaround from last year’s underlying loss before tax of A$1.28 billion.
There were just US$614.2 million (S$808 million) worth of IPOs in Australia in 2022, down nearly 93 per cent from US$8.4 billion a year earlier, according to Refinitiv data. REUTERS
