Virgin Australia is moving towards privatisation after confirming for the first time that the board is actively looking at a delisting if it can reach a deal to buy back the small percentage of stock held by minority shareholders.
«The board has held discussions about privatisation; however, there is no outcome to report to the market at this stage,» Virgin chairman Elizabeth Bryan told shareholders at the airline’s annual general meeting on Wednesday.
It was the first time Virgin had confirmed it was looking at the issue, although there has been speculation about privatisation for years given the airline’s tiny 8 per cent free-float, which is a source of frustration for minority shareholders.
Ms Bryan did not elaborate but it is believed there have been discussions with Virgin’s big airline stakeholders about buying out the minority shareholders. The other option is a potential management buyout of the remaining stock.
This would not trigger a full takeover of the airline but once the free-float is mopped up, Virgin would delist from the Australian Securities Exchange and operate as a private company.
Chief executive John Borghetti said the board had a responsibility to represent the interests of its minority shareholders but there was no outcome to the talks at this stage.
It is unclear when privatisation would take place but Ms Bryan’s comments indicate she was focused on sorting it out sooner rather than later.
The airline’s major shareholders Etihad, Singapore Airlines, Richard Branson’s Virgin Group, China’s HNA Group and Nanshan make up the bulk of its shareholding. The challenge will be reaching an agreement with the airlines about acquiring more stock at a premium. There has been talk in the past of several stakeholders getting together to buy out the other shareholders but that did not eventuate. Singapore and Etihad have foreign investment approval to own up to 25 per cent of the airline…
