Virgin Australia has announced that it intends to raise about $350 million through an entitlement offer to improve its liquidity position. Shareholders will be able to purchase five new shares for every existing 14 company shares held on November 19.
The airline’s major shareholders and strategic partners support the entitlement offer and will be taking up their full entitlements, Virgin Australia said today in a statement.
Virgin Australia chief executive officer John Borghetti said: “This capital raising is designed to enhance liquidity and the gearing position of Virgin Australia to ensure we are in a stronger position moving forward. It will provide the group with additional flexibility and resilience, enabling us to consolidate initiatives as part of the Game Change Program strategy.”
Air New Zealand, which currently holds 22.9 per cent of the shares in Virgin Australia and has regulatory approval in Australia to increase its holding to 25.99 per cent, confirmed that it is supporting the rights issue.
“The company will take up its full pro rata entitlement under the rights issue and sub-underwrite the issue together with the other major shareholders Singapore Airlines and Etihad Airways,” Air New Zealand stated. “In the event that additional shares are available from the underwriting, Air New Zealand’s shareholding could increase to as much as 25.5 per cent.”
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