Virgin formalises board changes as Bain pursues IPO plans in hope of quick market recovery

Virgin Australia’s owner is pushing ahead with its plan to relist the airline on the ASX, even as the sharemarket endures a bloodbath.

Virgin Australia’s owner Bain Capital is pushing ahead with preparations for a June initial public offering, formalising new board appointments amid tariff-related turmoil.

While $112bn was erased from the ASX 200 on Monday in response to an escalating trade war between the US and China, it’s understood Bain remained hopeful of a recovery in the next four to six weeks to allow the private equity firm to relist Virgin on the ASX.

Market volatility and personnel changes previously derailed plans for an IPO in 2023 and Virgin’s deal with Qatar Airways over a minority stake took precedence last year.

One of the selling points of the IPO has been the strength of Qantas shares, which had climbed 65 per cent in a year, only to plunge 11 per cent in the last week.

On Monday, Qantas shares briefly slipped below $8 for the first time in almost six months, closing at $8.12, down 3 per cent.

Australian Securities and Investments Commission filings formalised new board appointments for Australia’s second-biggest airline. Former Macquarie Group chairman Peter Warne, non-executive director Pippa Downes and Bain Capital partner Charles Lawson were added to its ranks, along with Qatar Airways’ chief cargo officer Mark Drusch.

It was expected Mr Warne would become the independent chairman ahead of a return to the ASX, replacing Bain Capital’s Ryan Cotton.

Mr Warne and Ms Downes were named appointees in 2023, when Bain Capital was first making preparations to launch an IPO.

Meanwhile, UniSuper chief investment officer John Pearce said it was likely a “sensible compromise” would be reached in the trade conflict, possibly after some more pain.

“We will get through this crisis. When you think Covid, the GFC, there were periods when frankly we didn’t know what the solution was,” Mr Pearce said on a podcast for members.

“Contrast that with the current crisis — it’s man-made, and it’s pretty much been made by a single man. The solution is for rational people to get around and understand the havoc that’s been created and get to a sensible compromise.”

Ex Macquarie Group chairman Peter Warne is poised to become the next Virgin Australia chair. Picture: John Feder

Among the points Bain was pushing to potential investors, was Virgin Australia’s profitability, after recording $439m in earnings before interest and tax for the six months to December 2024, and solid domestic market share which remains at around a third of all travellers.

Co-founder and co-CEO of InvestorHub, Ben Williamson said it might be a case of “now or never” for Bain in regards to the Virgin IPO.

Even with the global turmoil, he said Virgin had an “unfair advantage” in that the brand was very well known and people understood what the company did and how it made money.

“It is “easier” to understand than other stocks in the market - this is super important for the non-institutional investors,” said Mr Williamson.

“Think Myer and Telstra’s float; investors bought into the IPO and on-market because they understood the business.”

Bain Capital owns 68 per cent of Virgin Australia, with other shareholders including Qatar Airways, the Virgin Group and the Queensland Investment Corporation.

The US private equity firm also dominates the board, with five directors including Mr Cotton, Mike Murphy, Barnaby Lyons and Ray Hass, as well as newcomer Mr Lawson.

The changes follow the retirement of former CEO and board member Jayne Hrdlicka, and the sale of a 25 per cent stake in Virgin to Qatar Airways, approved by the Foreign Investment Review Board last month.

Ms Hrdlicka’s replacement Dave Emerson is expected to join the board at a later date.

Originally published as Virgin formalises board changes as Bain pursues IPO plans in hope of quick market recovery