Virgin Australia set to interview bankers for 2023 IPO

Virgin Australia Holdings Pty Ltd. plans to interview lead underwriters starting in February for a return to public markets as soon as this year, according to people familiar with the matter.

Australia’s second-largest airline and its owner Bain Capital will interview banks from the end of next week for joint lead manager roles assisting the company to list again on the Australian Securities Exchange, said the people, who asked not to be named while discussing confidential matters. 

A listing would come less than three years after Virgin Australia collapsed and was removed from the ASX. Its becoming sufficiently profitable to consider offering shares to the public is a sharp reversal that underlines how lucrative the post-pandemic travel boom has been for airlines.

A Bain spokesman declined to comment on specific timing, and directed Bloomberg to a statement from the firm last Monday that it would “shortly seek advice on a future IPO” of Virgin Australia.

“Prior to Covid, Virgin Australia had a proud history as a public company,” Bain Capital partner Mike Murphy said in the earlier statement. “While there is currently no set timetable, at some point in the future, if any IPO does happen, Bain Capital would welcome public market investors joining us as shareholders.”

Financial results lodged with the Australian Securities and Investments Commission for the fiscal year ending June 30 showed an operational loss of A$386.7 million ($270.2 million). Yet by September, chief executive Jayne Hrdlicka was saying the Australian airline had made enough financial progress that a listing was a possibility.

Meanwhile, shares of Australia’s largest carrier, Qantas Airways Ltd., traded at their highest Monday since February 2020. Qantas should return to fiscal 2023 Ebit profit across its segments as market reopenings accelerate, led by the passenger business. Revenue there should top 80% of total for the first time since Covid struck, according to Bloomberg Intelligence analysts.

Bain plans to keep a significant shareholding in a future IPO of the company, Murphy said.