Virgin Australia confirms long-awaited return to ASX with $685m IPO

Virgin Australia has confirmed long-awaited plans to launch a near-$700 million initial public offering and re-list on the Australian Securities Exchange.

Following days of market speculation, Australia’s second-biggest airline issued a prospectus on Friday, with the offer period running between June 16 and June 19. Shares are expected to start trading on June 24 under the ticker VGN.

The fully underwritten IPO of 236.2 million shares is priced at $2.90 apiece and is expected to raise $685m, valuing the airline at just over $2.3 billion.

Under the float, Virgin’s US private equity owner Bain Capital’s shareholding will drop from about 70 per cent to 40 per cent, while minority shareholder Qatar Airways will retain its 25 per cent stake.

The return to the boards comes after the nation’s competition regulator in March cleared Virgin and Qatar’s five-year partnership allowing the Australian airline to use Qatar aircraft and crew to operate new services under a so-called “wet lease” arrangement.

From next week, Virgin will return to long-haul flights between Doha and Perth, Brisbane and Sydney. Flights to and from Melbourne will start in December.

Bain bought Virgin in 2020 after the airline crashed into administration with billions of dollars worth of debt following the onset of the COVID-19 pandemic. Over the past few years, it has made several attempts to get Virgin back on to the ASX.

Virgin chief executive Dave Emerson on Friday said the airline was a simple, focused business with a transformed operational and commercial model.

“We have a clear strategy and an incredible team of people who deliver wonderful flying experiences to our customers every day,” he said.

“We are delivering on our ambition to be Australia’s most loved airline and continuing to expand our award-winning Velocity frequent flyer program.”

Virgin chair Peter Warne said it was an appropriate time for the business to transition to a publicly listed company.

“This provides an opportunity for new investors to share in the success of Virgin Australia as the airline enters its next phase,” he said.

“I commend all those involved in orchestrating Virgin Australia’s remarkable turnaround and setting the business up for long-term success.”