Virgin Australia has just announced a “fully underwritten 5 for 14 pro rata accelerated non-renouncable entitlement offer,” with the aim of raising $350 million.
“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,” said ceo John Borghetti.
He said the funding would give the company additional flexibility and resilience, “enabling us to consolidate initiatives as part of the Game Change Program strategy”.
Virgin Australia’s major shareholders and strategic partners are supportive of the offer and will be taking up their full entitlements, with Air New Zealand, Etihad Airways and Singapore Airlines all either sub-underwriting the offer or committing to increasing their economic exposure via “cash settled derivatives”.
VA chairman Neil Chatfield said the support of the carriers demonstrates their confidence in the strategy, and said that given their substantial shareholdings “the Virgin Australia Board intends to work with the airline shareholders for future board representation with appropriate protocols”.
“Virgin Australia has fundamentally changed the way that airline alliances operate and we believe that significant future benefits can be achieved from our alliances as we continue to deepen relationships with our partners,” he said.
Borghetti reiterated that the carrier was unable to provide profit guidance due to the uncertain economic environment, competitive challenges and market volatility.
More information in today’s Travel Daily.