Stock of the day: Virgin Australia
Virgin Australia is set to relist with a $685 million initial public offering. Bain Capital's reduced ownership highlights potential risks, leading to increased scrutiny of the airline’s performance.
(AI video summary)
This video was created on 6 June 2025 for IG audiences by ausbiz.
ASX code: VAH
Virgin Australia's upcoming IPO
Virgin Australia is preparing to return to the Australian Securities Exchange (ASX), with private equity owner Bain Capital aiming to raise $685 million through an initial public offering (IPO).
The offer, priced at $2.90 per share, represents 30% of the airline’s total issued capital. This values the carrier at $2.32 billion, with an enterprise value (EV) of $3.6 billion, including $1.31 billion in net debt.
Bain cuts stake, Qatar retains holding
Bain Capital, which acquired the airline during its 2020 administration, will reduce its holding to 39% post-IPO. Qatar Airways, which already holds a significant interest in the airline, will retain its 23% stake.
As Australia’s second-largest airline, Virgin’s relisting is attracting attention - though not widespread enthusiasm from market experts.
Concerns over private equity-backed floats
Analysts express caution regarding Virgin Australia's IPO, referencing past examples such as Myer, Adore Beauty, and Dick Smith, where companies were offloaded with high debt levels and underperformed after listing.
As Virgin Australia prepares for its market debut, observers suggest monitoring its performance from the sidelines before making investment decisions.
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