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Virgin Australia's ASX Comeback with $685 Million IPO

Virgin Australia's ASX Comeback with $685 Million IPO

Virgin Australia's ASX Comeback with $685 Million IPO?w=400
Virgin Australia is poised to make a significant return to the Australian Securities Exchange (ASX) through an initial public offering (IPO) aimed at raising $685 million.
Bain Capital, the US private equity firm that currently owns a substantial portion of the airline, is set to sell 30% of its stake at $2.90 a share.
This sale values Virgin Australia at just over $2.3 billion, compared to rival Qantas, whose shares were trading at $10.70.

Under Bain's ownership since 2020, following the airline's collapse into administration amidst the COVID-19 pandemic, Virgin Australia has made several attempts to relist on the ASX. Previous attempts in 2022 and 2023 were abandoned due to market volatility and external factors. However, a recent high in the S&P-ASX200 index has paved the way for this new IPO effort.

The decision also follows Bain’s partial sale of a 25% stake in Virgin Australia to Qatar Airways in 2023. This collaboration allowed Virgin to resume long-haul flights using Qatar Airways' fleet, enhancing its operations from major Australian cities to Doha.

Post-IPO, Bain’s involvement will reduce to an approximately 40% stake, while Qatar Airways will maintain its existing shareholding.

The financial landscape for Australian airlines has been shifting, with diminishing competition following the retreat of Regional Express from major routes. This shift has allowed Virgin to capture a larger market share, now approximately 34% as of March. Meanwhile, Qantas has reported substantial earnings for the first half of the financial year, primarily from its domestic operations.

Virgin's upcoming IPO marks nearly five years since it was last publicly traded. The current market conditions and recent achievements in profitability and network expansion offer a promising outlook for its return to public trading.

Looking forward, the Australian Competition and Consumer Commission has highlighted the potential for a duopoly between Qantas and Virgin, as competitive pressure remains low. This environment, alongside Virgin's strategic moves, sets the stage for both challenges and opportunities post-IPO.

Investors and stakeholders will be watching closely as the airline re-enters the public market, considering both its recent history and future growth potential.

Published:Thursday, 5th Jun 2025
Source: Paige Estritori

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