Bain's Virgin Australia Advances in Sydney After Relisting
(Bloomberg) -- Bain Capital's Virgin Australia rose in Sydney trading after raising A$685 million ($444 million) in one of the country's biggest initial public offerings of the year.
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The stock climbed as much as 9.7% to A$3.18 on Tuesday. The relisting — the company was publicly traded before collapsing in the early days of the Covid pandemic — is the biggest airline IPO in the Asia Pacific region in a decade, and was Australia's biggest IPO of the year until resorts developer GemLife Communities Group's A$750 million deal, according to data compiled by Bloomberg.
Australia's benchmark index is approaching a bull market, brightening the prospects for IPOs and share sales, but investor optimism could be dampened should tensions in Iran escalate and drive up oil prices. Airlines are particularly exposed to geopolitical conflicts in the Middle East because of their high vulnerability to high fuel prices.
But airline shares rebounded across Asia Pacific on Tuesday as oil prices retreated amid receding concerns about Iran.
Bain sold a 30% stake in the IPO but will remain Virgin Australia's biggest shareholder with a 40% stake, while Qatar Airways will also keep being a substantial holder. Billionaire Richard Branson's Virgin Group no longer counts the Australian airline as a subsidiary, but it retains ties through a brand licensing agreement.
The IPO has been in the works for at least two years after Bain's purchase of the airline in 2020. Prior to its delisting, it struggled to secure funding from investors to support it throughout the pandemic. It rarely traded above its earlier IPO price when it first listed.
Goldman Sachs Australia Pty, UBS Securities Australia Ltd. and Barrenjoey Markets Pty. acted as the joint lead managers and bookrunners for the transaction.
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