Virgin Australia launches $442.8 million IPO, term sheet shows
A Virgin Australia Airlines plane is seen at Kingsford Smith International Airport in Sydney, Australia, March 21, 2020. REUTERS/Loren Elliott/File Photo
BAIN Capital-owned Virgin Australia is looking to return to the stock market with a A$685 million ($442.78 million) initial public offering, according to a term sheet seen by Reuters on Wednesday.
Bain will sell about 30% of the airline at a fixed price of A$2.90 per share, the term sheet said.
Bain declined to comment on the plan.
The private equity group will sell 236.2 million shares in the IPO to value the company at A$2.32 billion on a fully diluted basis, the term sheet showed.
Bain's shareholding will drop from about 70% to 39.4% following the sale, while Qatar Airways will retain a 23% stake, according to the term sheet.
Investors had lodged indicative bids before book building began that would cover the size of the deal, a bookrunner's message sent on Wednesday showed.
Virgin will have an enterprise value of A$3.6 billion, taking into account its net debt of A$1.31 billion.
The airline's IPO is one of the most closely watched deals in Australia in years because of its strong reliance on the country's consumer sector. Virgin has pared back its international business to concentrate mainly on domestic travel, but is due to resume some long-haul flights through its Qatar partnership.
Virgin has a domestic market share of 34.4%, lagging its major rival Qantas which had 37.5% as of March, according to an Australian Competition and Consumer Commission (ACCC) report.
The deal will be the largest IPO in Australia this year after DigiCo Infrastructure REIT raised A$2 billion in December. DigiCo's shares have traded down about 30% since its debut.
Institutional bookbuilding will close on Thursday and Virgin's shares are due to start trading on the Australian Securities Exchange (ASX) on June 24, the term sheet showed.
The IPO is being carried out through a front-end book building process, which means investor bids are taken ahead of the prospectus being reviewed and approved by Australian regulators.
Virgin's IPO has been in the making for more than two years but was put on hold after investment banks were appointed due to volatile global financial markets during 2023.
Bain bought Virgin for A$3.5 billion including liabilities five years ago after it was placed in voluntary administration, the closest Australian equivalent to Chapter 11 bankruptcy.
Virgin collapsed in 2020 following tough COVID-19 restrictions that damaged the global airline industry.
Australia's benchmark S&P/ASX200 index has gained 3.77% so far in 2025. - Reuters
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