Virgin Blue float set to go ..... before Xmas possibly

Status
Not open for further replies.

ozstamps

Active Member
Joined
Aug 30, 2003
Messages
955
Points
320
Virgin
Platinum
Virgin float set to go

A Virgin Blue float worth up to $2 billion appears certain to go ahead in the next six months after its two owners announced on Wednesday they had resolved their long-running dispute about the structure of the company.

Chris Corrigan's Patrick Corp and Sir Richard Branson had been bickering about the structure of their shareholders agreement, which was threatening to derail a public float of the airline.

However, Patrick said it had agreed to allow $400 million of new capital to be issued in an initial public offering of Virgin Blue.

In return, Sir Richard will allow Patrick to buy enough new shares to maintain a minimum of 45 per cent stake and has agreed to a substantial discount of the deferred payment owed by Patrick for its half share in the airline.

Patrick will pay a further $240 million to Sir Richard, adding to the initial outlay of $260 million last year.

Under the original escalator clause, Patrick may have owed up to $330 million based on a valuation of $1.7 billion for the airline.

Patrick said in its statement that the timing of the float is to be "at the discretion" of Virgin, but most analysts expect a float before Christmas if time allows, or at least early in the New Year.

Both parties are sitting on windfall gains from their investment, with analysts tipping the airline to be valued at $1.7 billion to $2 billion after the float. That would be nearly four times its value when Patrick bought into the airline in April last year.

Virgin Blue trebled its net profit for the year to March to $110.3 million as it more than doubled revenue to $924.3 million.

The airline is set to try and duplicate its success in the domestic market by launching a new trans-Tasman service, although this could be threatened by an anticipated fare war after regulators rejected Qantas' merger deal with Air New Zealand.

Patrick currently holds a 50 per cent stake in Virgin, but has repeatedly stated it wanted to retain a stake of at least 45 per cent.

Sir Richard currently holds 46 per cent, but is likely to sell down to around 30 per cent after a float. Virgin Blue staff hold the remaining 4 per cent.


-----------------------------------------

So Branson will have pocketed $A500m cash from Patrick. PLUS will benefit from the float, ongoing cash flow and profits, AND will still hold an approx 33% stake in the floated approx $A2bn entity.

Tearing up that $A250m cheque from AN for the whole operation was a pretty wise move in hindsight. :)

-------------------------------------
 
Your simple solution to home security. Quickly view what’s happening at home when you're not there, giving you peace of mind.

Simple plug-in installation means you’ll be up and running in no time.

AFF Supporters can remove this and all advertisements

Status
Not open for further replies.

Enhance your AFF viewing experience!

From just $6 we'll remove all advertisements so that you can enjoy a cleaner and uninterupted viewing experience.

And you'll be supporting us so that we can continue to provide this valuable resource :)


Sample AFF with no advertisements? More..

Community Statistics

Threads
87,550
Messages
2,151,419
Members
54,546
Latest member
thomas7
Top