Virgin Australia’s IPO expected for second half of 2023

Virgin Australia’s parent company Bain Capital has begun to book introductory meetings with potential investors for the airline’s initial public offering (IPO), The Australian reported.

Sources said that the IPO is likely to happen in the second half of this year and the float has heard a positive response from international investors following meetings. Virgin Australia’s advisers were trying to make the business public by June, per The Australian, but this could be a touch too ambitious.

If Bain Capital can draw the right level of investment then the deal could go ahead in the second half of 2023.

There have been reports that the American private investment firm would ask prospective investors to pay more for Virgin’s shares than Qantas, which currently trades at over 3 times its EBITDA.

Under the guidance of Virgin Australia’s CEO, Jayne Hrdlicka, the carrier is looking to operate as more of a lower cost carrier than it had previously. This would put the airline somewhere between a low-cost airline like Jetstar and a middle market airline like Air New Zealand. This comes amid the slowing economic environment and the widening costs between full-service flights and budget flights.

Those who are interested in Virgin’s IPO were told last month that the airline’s borrowings were $1.97b in December. It’s expected that Bain Capital wants to put a $3b equity value of Virgin Australia, but there’s no hard figure yet as to how much the airline would go for via a float.

The Australian reported that Goldman Sachs UBS and Barrenjoey are working on the transaction.

Bain Capital said in January that if an IPO is pursued, securities will only be offered under a prospectus lodged with the Australian Securities and Investments Commission, and any decisions about participating in the offer should be made after review of that prospectus.

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Bain Capital ipo virgin australia