In what appears to be one of Australia’s largest initial public offerings (IPOs) in 2023, Bain Capital is keen to relist Virgin Australia. Bain is planning to seek advice on the timing and structure to return the airline to Australian Securities Exchange but a final decision has not yet been taken.
Mike Murphy, Partner at Bain Capital, said: “The carrier had delivered an impressive transformation since it was plucked out of administration and near-demise for $3.5 billion in 2020. In the coming months we will consider how to best position Virgin Australia for continued growth and long-term prosperity. It is Bain Capital’s current intention to retain a significant shareholding in a future IPO of Virgin Australia.”
It sent a request for proposals on the listing to investment banks on Monday and expects to make appointments within a month, according to a Reuters report. Aviation market conditions have improved substantially since then after Australia’s state and international borders reopened. Virgin has also rebuilt its Boeing 737 fleet to around the same size it was before the pandemic.
Murphy confirmed Bain would retain a significant shareholding in the event the airline relisted on the ASX.
“Virgin Australia had a proud history as a public company. While there is currently no set timetable, at some point in the future, if any IPO does happen, Bain Capital would welcome public market investors joining us as shareholders in what is a great Australian company. Bain Capital will ensure these preliminary deliberations are not a distraction for Virgin Australia management, who can remain 100 per cent focused on their roles,” Murphy further added.
Bain valued Virgin at about $1 bn when it restructured the airline at the beginning of 2021.
Meanwhile, Virgin Australia reported an operational loss of $386.7 million in 2022, compared with $76.8 million in 2021. Since then, the airline has reduced its costs by $300 million and has grown its fleet by over than 50% since February 2022.