Virgin Australia in a holding pattern as Bain delays float plans

Bain paid $700m in equity for Virgin Australia when it bought the airline out of administration in 2020.

Bain Capital is understood to have shelved plans to list Virgin Australia this year, with any initial public offering of the carrier not on the cards until 2024 at the earliest.

Virgin Australia had carried out introductory meetings with offshore investors about its IPO plans, and had booked in meetings with local investors.

But the meetings later cancelled, as chief executive Jayne Hrdlicka dealt with the death of her husband.

The only major company listing this year has been Redox, and while it is finally trading above its $2.55 per share issue price, it traded below that level for some time.

Abacus Storage King’s shares also struggled to gain positive momentum after it was demerged from Abacus Property Group.

Some think the final nail in the coffin for a listing this year was the share price of major rival Qantas.

Qantas shares have fallen from over $6.60 in July to $5.83. Outgoing chief executive Alan Joyce faces strong criticism for objecting to Qatar Airways providing additional flights in Australia. There was also controversy over Anthony Albanese’s son Nathan being offered membership of the Qantas chairman’s lounge. And the airline faces court action over claims it sold tickets for flights that had been cancelled up to 47 days before.

Sharemarkets have been volatile, and institutional investors are remaining on the sidelines at a time of high interest rates.

Bain paid $700m in equity for Virgin Australia when it bought the airline out of administration in 2020, when its debt level was $5.15bn.

It hired investment banks Goldman Sachs, UBS and Barrenjoey for an initial public offering of the carrier that was slated for this year.

The concern from some is that the airline may have missed its window, with earnings soaring on the back of strong demand from passengers in the aftermath of the pandemic.

The plan has been for Virgin Australia to have about $1.97bn in borrowings, with a $3bn-odd valuation.

Virgin Australia is the country’s No.2 carrier with 19 million passengers and 7000 staff. It has experienced bumper conditions, with strong airline demand in the aftermath of the pandemic.