Investment banks launch promotional tour for Virgin IPO

Virgin Australia is expected to be heading to the boards in May.

Investment banks working for Virgin Australia have started booking meetings with offshore investors to educate them on the $3bn airline’s financials ahead of an initial public offering in May.

It is understood that Virgin and its advisers will head offshore in the next few weeks for limited meetings.

Meetings with Australian fund managers are expected to occur closer to the time of the IPO in May.

Bain Capital last month appointed Goldman Sachs, UBS and Barrenjoey for the float of Virgin.

The carrier is being positioned as a business that is expected to be valued at $3bn and the listing slated for May comes after Bain Capital purchased the airline out of voluntary administration during the global pandemic in 2020 for $3.5bn including debt.

When it collapsed, Virgin had loans worth $5bn, and expectations are it will list with low debt levels that would be less than one times its earnings.

Virgin Australia is understood to be generating about $400m in annual net income.

Suggestions are that Bain will likely retain between 50 and 60 per cent of the business.

Run by former Qantas and Jetstar executive Jayne Hrdlicka, the carrier experienced bumper conditions last year as people resumed travel.

Ms Hrdlicka has been targeting a 33 per cent share of the domestic market by increasing the frequency of flights and reach of its network.