Virgin Atlantic (VS, London Heathrow) is considering going public after its institutional investors responded positively to management’s overtures.
Sources familiar with the developments told SKY News that an IPO announcement could be made later this fall with a listing taking place on the London Stock Exchange. Citi and Barclays have been hired to oversee the list, they said.
The British carrier is currently split 51/49 between Virgin Group and Delta Air Lines (DL, Atlanta Hartsfield Jackson). As such, the number of shares to be offered to investors remains to be determined.
According to the sources, while Virgin Atlantic does not have an urgent need for new funding, with adequate funding in place to carry it through over the next few months, a listing would provide it with further opportunities to raise funds at the same time. future if the need arises.
Virgin Atlantic declined to comment on what it called “speculation” when contacted by ch-aviation for comment.
While, like other carriers around the world, Virgin has suffered greatly from the COVID-19 pandemic, it is basing its hopes on pent-up demand for international travel and it is this angle that its executives hope to exploit as part of the IPO.
To help it survive the crisis, Virgin Atlantic secured a solvent, privately funded recapitalization in September 2020 that will provide a refinancing plan worth around £ 1.2bn ($ 1.67bn). US) until March 2022.
Of this, Virgin Group and Delta are providing approximately £ 600million (US $ 833million) of support over the life of the plan, including a £ 200million (US $ 278million) investment from Virgin Group. and the deferral of approximately £ 400 million (US $ 555 million) in payments to shareholders. such as branding fees and joint venture costs. In addition, Davidson Kempner provided £ 170m (US $ 236m) in secured financing while Virgin’s largest suppliers contributed £ 450m (US $ 624m) in deferral. Earlier this year it had to raise around £ 300million (US $ 416million) in additional capital through the sale / lease-back of two B787-9s and securing a loan from Virgin Group.
A reduction in the cost base and the simplification of its fleet and network resulted in £ 335 million (US $ 465 million) in cost savings in 2020 (with over £ 200 million ( US $ 278 million) in recurring cost reductions).
According to its latest published financial statements, as of February 28, 2021, Virgin Atlantic and its subsidiaries had total cash balances of £ 194million (US $ 269million) (including unallocated cash of £ 104million ( US $ 144 million)).