Sir Richard Branson has finally confirmed he’s acquired a 5 per cent stake in the new Virgin Australia, days after the airline exited administration.
Speculation had suggested he was keen to maintain the 10 per cent holdings he held in the business prior to its administration but has settled for less while also agreeing on a new licensing deal for his corporate branding.
Virgin Group founder Sir Richard said in a short statement issued on Thursday evening, “I’m delighted that Virgin Australia is ready for take-off once more, soaring out of administration, with a clear future direction to fly towards.
“We’re very optimistic about the future and enormously proud of all of the Virgin Australia team.”
The wider Virgin Group held a 10 per cent stake in the airline before it collapsed into administration in April. The next month, investors Bain beat out Cyrus Capital Partners to become the administrator’s preferred bidder, but the decision wasn’t rubber-stamped until September, after receiving shareholder approval.
Prior to administration, Virgin Australia was paying the larger Virgin group $15 million to use its branding. However, rebranding the airline again would be a costly exercise given the volatile market.
The move was expected after he broke a months-long silence to endorse Bain as the new owners on the eve of the final creditors meeting to rubber-stamp the succession.
“I have confidence in the revival plan for Virgin Australia, and Virgin will be working closely with Bain to rebuild the airline,” Sir Richard said.
“As the founding shareholder, I am extremely proud of what Virgin Australia has achieved over its first 20 years.
“We look forward to helping to create the next important chapter, as Virgin Australia get back to flying and connecting Australia once again.”
Despite his small stake in the business, Sir Richard was the most vocal investor when the airline collapsed, releasing an Instagram message to staff within hours of the administration being confirmed.
“This is not the end for Virgin Australia and its unique culture,” he said. “Never one to give up, I want to assure all of you, and our competitor, that we are determined to see Virgin Australia back up and running soon.”
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The Virgin Group is already involved in a joint venture with Bain, called Virgin Voyages.
Meanwhile, The Sydney Morning Herald has reported that Queensland will sign a 10-year-deal to acquire around 2 per cent of the company, ensuring its base remains in Brisbane.