Virgin Australia chairman says board has discussed privatisation

More than 90 per cent of Virgin Australia shares are held by five major shareholders. (Rob Finlayson)
More than 90 per cent of Virgin Australia shares are held by five major shareholders. (Rob Finlayson)

Virgin Australia chairman Elizabeth Bryan says the airline group’s board has discussed the matter of whether the company should be privatised.

Speaking to shareholders at the company’s annual general meeting (AGM) in Brisbane on Wednesday, Bryan noted there had been speculation over the past year regarding whether the airline group would remain listed on the Australian Securities Exchange (ASX), given its small percentage of minority shareholders.

However, while the board had discussed the matter, no conclusions had been reached.

“The group has a small free float and many have asked the question of whether it is appropriate to remain listed, or to become a privately-held company,” Bryan said in prepared remarks.

“We have a responsibility to ensure that we act in the best interests of all shareholders and in the long-term interest of the company. As part of fulfilling this responsibility, the board has held discussions about privatisation, however there is no outcome to report to the market at this stage.”

A screenshot of Virgin Australia chairman Elizabeth Bryan on the webcast of the company’s 2017 annual general meeting. (Virgin Australia)
A screenshot of Virgin Australia chairman Elizabeth Bryan on the webcast of the company’s 2017 annual general meeting. (Virgin Australia)

Virgin Australia’s five major shareholders – Etihad Airways, HNA Group, Nanshan, Singapore Airlines and UK-based Virgin Group – hold more than 90 per cent of issued stock in the company.

Privatisation would mean Virgin Australia would be de-listed from the Australian Securities Exchange (ASX) and no longer be subject to obligations such as continuous disclosure rules.

Any process to de-list the company could be achieved through existing major shareholders buying more shares under so-called creep provisions that allows them to increase their stake without making a takeover bid, a management buyout or one shareholder announcing a takeover bid.

Bryan said it was her responsibility as chairman to act in the best interests of all shareholders.

“As an independent chair with a large and varied shareholder base, I am particularly conscious of what a small free float means for our minority shareholders,” Bryan said.

“It is my responsibility, and that of all our directors, to ensure that the interests of the minority shareholders are represented at the board.”

Virgin Australia shares were up 1.2 cents, or 6.15 per cent, at 20.7 cents, in morning trade on the ASX.

Comments

  1. travel says

    Why didn’t they buy out the Mum and Dad investors years ago?

    From where I sit VA finally has a business model and structure where they can start to create value. Up till this time the airline has been run for the benefit of the airline investors destroying the value retail shareholders had in the company.
    If VA turns the profit corner in a similar manner to that of QANTAS, a buyout and privatisation of the airline could see the retail investors loose the opportunity to see the value of their share holding increase by 350%.
    Using the QANTAS current share price and current average ticket price this is a very reasonable number.

    Is this just another case of the big end of town simply using the Mum and Dad investors as play things? Are they being milked once again? I hope not!

    Let’s just hope the shenanigans of the past are over and this airline now has the ethical fortitude to treat all of its shareholders equally.

    My buying decisions and hopefully that if others will be based upon it.

  2. Rod Pickin says

    As a previous VAH investor who received no capital gain, no dividend no benefits whatsoever and now I see the airline wallowing in the commercially unknown world I wonder who would want to own the company, just how much capital can one loose without remedial change. The other interesting question, – if the company does exit the ASX umbrella and become a private entity, would it still be allowed to operate within Oz?

  3. says

    I am in no position to comment on this particular issue, however, as now only a bystander, priced out of G. A. at Cairns airport, by the take-over of ownership at Cairns airport, I would seriously like to know the financial standing there today.
    The airport is being run by International Banking and Real Estate gurus, with very little understanding of the need for G.A., and many local people have been deprived of a once thriving society, including our own Flying Training facility, which has been forced to re-locate at Mareeba.
    This has caused a very large financial burden on would be Pilots of the future, plus the drive up to Mareeba is often very hazardous due to the mountain range conditions, especially during our regular wet weather.

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