Virgin Australia IPO Discussion

[RooFlyer]

That whole debate was based on a member extrapolating the 1B investment x 4 for the value of VA, which I disagreed with. But it seems we are now in agreement (rare I know).

No, it wasn’t. I've gone through the meaning of 'yardstick' in this context before, and I’m not going to re-argue it all over again. You do you.

 

[justinbrett]

No, it wasn’t. I've gone through the meaning of 'yardstick' in this context before, and I’m not going to re-argue it all over again.

It was. Look at the comment I was replying to when I made that post.

 

[RooFlyer]

The money went to Bain not VA, so there is no offsetting for future lease costs. That would effectively be QR bribing Bain to take a certain course of action with its management of VA, which is of course illegal.

Are you sure? it says 'consideration' not 'price paid'. I don't know; the article you linked to says:

At the point of acquisition, says the airline, Virgin Australia had negative net assets – mainly owing to accumulated losses from previous years.

“As a result, a substantial portion of the purchase price is expected to be allocated to goodwill and identifiable intangible assets,” says Qatar Airways in its full-year financial statement for 2024-25.

It says this reflects anticipated synergies, future earnings potential, and strategic benefits derived from the investment.

The Doha-based carrier is conducting a purchase price allocation exercise, yet to be finalised, which could identify intangible assets such as airports slots and the loyalty scheme.

I would need an accountant to explain all that. It could mean all the things referenced to are on Bain's balance sheet and therefore technically the money would go to Bain but it’s hard to tell.

 

[justinbrett]

Are you sure? it says 'consideration' not 'price paid'. I don't know; the article you linked to says:




I would need an accountant to explain all that. It could mean all the things referenced to are on Bain's balance sheet and therefore technically the money would go to Bain but it’s hard to tell.

That’s the way it was reported. If the money didn’t go to Bain, and now Bain only has a 70% share (as reported today) they have already lost a lot of money from their $A3.5B investment. But no, the numbers work if the money went direct to Bain.

 

[AuSammy]

What's the saying, a fool and his money...?

I thought the saying went along the lines of
“how do you make a small fortune in aviation……. start with a large one”

 

[cove]

Bain need this first issue to be a success so that they get to sell further issues to the market. They won’t want to get stuck with 40% forever.

 

[Bagpuss]

Bain need this first issue to be a success so that they get to sell further issues to the market. They won’t want to get stuck with 40% forever.

I thought Bain had always maintained they wanted to hold the majority share. Time will tell.

 

[cove]

I am bidding as this tranche is cheap to get the company listed. May not get any.
I believe all the bids are now in so it will be a wait and see who gets some.

 

[cove]

Ok this first tranche issue is oversubscribed so my chances of getting my bid filled is most unlikely.

 

[RooFlyer]

That’s the way it was reported. If the money didn’t go to Bain, and now Bain only has a 70% share (as reported today) they have already lost a lot of money from their $A3.5B investment. But no, the numbers work if the money went direct to Bain.

I don’t follow this at all. Bain has easily recouped its initial expenditure to acquire VA. How much of that $3.5 billion is assigned to debt?

Anyway, I think it best to wait for the Prospectus rather than all this speculation. If we are lucky it might include some pre IPO funding. I have a very vague memory that they need to create two years of balance sheet and P&L before the IPO and then show how the IPO funding will be utilised.

@cove you were bidding as a sophisticated investor and without the prospectus I think?

 

[cove]

Yes USER=42401]@RooFlyer[/USER] the pre offer had all the Instos scrambling to get their bit.
It was all over by 9am this morning as it got rushed. A PE of about seven got them rushing into the offer.
The next offering will be at a higher price is what everyone is thinking.
I would not be surprised if the offer was over subscribed by a lot.

 

[SYD]

Yes USER=42401]@RooFlyer[/USER] the pre offer had all the Instos scrambling to get their bit.
It was all over by 9am this morning as it got rushed. A PE of about seven got them rushing into the offer.
The next offering will be at a higher price is what everyone is thinking.
I would not be surprised if the offer was over subscribed by a lot.

Institutional investors are often compelled to buy stock to maintain their coverage of the ASX etc. So it gets snapped up quickly.

I personally wouldn’t touch it with a barge pole. Yeah, there might be some initial uptick but it’ll drift down in due course.

 

[RooFlyer]

I personally wouldn’t touch it with a barge pole. Yeah, there might be some initial uptick but it’ll drift down in due course.

I'm certainly not inclined to get any, except using the thinking that @cove has put down. Prospectus will be an interesting read!

I note there was a book-build, after all.

 

[cove]

So the book build went off like a rocket. Virgin has over 10 million folks in their loyalty scheme.
There will be many more who missed out than got some shares in this first tranche.

 

[trisreed]

I don’t suppose you’ve read the prospectus?

Virgin Australia Holdings Limited Initial Public Offering

www.virginaustraliaipo.com.au

Usual legal disclaimers, etc. etc.

 

[RooFlyer]

Virgin Australia Holdings Limited Initial Public Offering

www.virginaustraliaipo.com.au

Usual legal disclaimers, etc. etc.

thank you. It’s going to be a tough read on my phone !

 

[RooFlyer]

I see from online stories that they’ve taken the P out of IPO

 

[Saab34]

Seems like Jayne Hrdlicka’s share rights will remain confidential. Needless to say it will be significant and analysts have predicted a wide range being $30-50m.

I’d say her salary and incentives in the prior years including advising Bain pre purchase would be significant also. No doubt it will come out one did like it all did for Alan Joyce. $100m in 5 years? Certainly possible.

 

[justinbrett]

The discrepancy in QR’s shares (which was reported as 25% but now confirmed as 23.4%) seems to work out that Bain sold 25% of its stake to QR; 25% of 93.6% is 23.4% exactly.

My only question is the remaining 6.4%, it was reported that Virgin Group had 5% and QIC had 2%, and now this says it includes former and current employees. That’s quite a crowded room for 150M of equity.

 

[Saab34]

Has BC Hart absorbed the QIC and Virgin Group stake? I can’t see it anywhere in the prospectus. Bain had 68% which has now jumped to 70%

A few years ago, JH and the executive team got 42m shares valued at $1 each. Obviously now worth $120m but unknown if that’s part of the Staff stake either.