Bain Capital explores Virgin Australia IPO as aviation market improves


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SYDNEY — Bain Capital said on Monday it is looking to relist Virgin Australia – a move that comes as the domestic aviation market bounces back strongly from its pandemic lows.

A listing of the country’s second-biggest airline would likely be one of Australia’s largest IPOs in 2023 after capital markets activity plunged last year amid global financial market uncertainty.

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“In the coming months we will consider how to best position Virgin Australia for continued growth and long term prosperity,” Mike Murphy, a Sydney-based partner at the U.S. private equity firm said in a statement.

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“It is Bain Capital’s current intention to retain a significant shareholding in a future IPO of Virgin Australia.”

Bain said it would seek advice on the best timing and structure to return the airline to the Australian Securities Exchange but added that no decisions had been made as to if and when that would happen.

It sent a request for proposals on the listing to investment banks on Monday and expects to make appointments within a month, according to two sources with direct knowledge of the matter who were not authorized to speak with media.

Bain bought Virgin Australia for A$3.5 billion ($2.45 billion) including liabilities in 2020 after the airline was placed in voluntary administration. Creditors approved the buyout in September 2020.

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Aviation market conditions have improved substantially since then after Australia’s state and international borders reopened. Virgin has also rebuilt its Boeing Co 737 fleet to around the same size it was before the pandemic.

The potential listing comes as rival Qantas Airways Ltd is poised to post a first-half underlying profit of between A$1.35 billion and A$1.45 billion next month, a sharp turnaround from last year’s underlying loss before tax of A$1.28 billion.

There were just $614.2 million worth of IPOs in Australia in 2022, down nearly 93% from $8.4 billion a year earlier, according to Refinitiv data. ($1 = 1.4310 Australian dollars) (Reporting by Scott Murdoch and Jamie Freed in Sydney; Additional reporting by Harish Sridharan in Bengaluru; Editing by Tom Hogue and Edwina Gibbs)


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