Sir Richard Branson’s Virgin Atlantic Airways is plotting a shock flotation on the London Inventory Alternate because it pins its hopes on a speedy rebound in transatlantic journey.
Sky Information has learnt that Virgin Atlantic has been holding talks with institutional traders about making its public market debut simply 5 months after touchdown a contemporary £160m capital injection.
Metropolis sources mentioned this weekend that establishments’ response to administration shows led by the airline’s executives had been constructive, and that an autumn announcement of an intention to drift now regarded seemingly.
An preliminary public providing (IPO) would mark the primary time since Virgin Atlantic’s launch in 1984 that it has offered shares to the general public – and would virtually definitely see Sir Richard relinquish total management of the enterprise.
Bankers at Citi and Barclays have been employed to supervise the itemizing, in line with insiders.
Virgin Atlantic is majority-owned by Sir Richard’s Virgin Group, which holds a 51% stake.
Delta Air Strains owns the remaining 49%, with the corporate having scrapped a deal in late 2019 that will have seen Air France-KLM buying a 31% shareholding from Sir Richard.
Promoting shares to the general public would inevitably imply Virgin’s stake being diluted except Sir Richard elected to subscribe for brand new fairness within the IPO.
A flotation of Virgin Atlantic could be one other milestone for an airline which has been among the many business’s worst-hit by the pandemic, largely due to its dependence on profitable UK-US flights.
Final September, it assembled a £1.2bn rescue bundle which included a £200m injection from its founder, a mortgage from the American hedge fund Davidson Kempner Capital Administration, and substantial contributions from current collectors.
That restructuring was carried out on a solvent foundation, however solely after directors had been positioned on standby.
The aviation business’s failure to stage a speedy restoration amid continued journey restrictions led Virgin Atlantic to hunt a complete of roughly £300m extra – in two instalments – that was generated by the sale of a number of Dreamliner plane and an extra mortgage from Virgin Group.
Virgin Atlantic just isn’t in pressing want of recent funding, with enough financing in place to see it via the following few months, in line with insiders.
Nonetheless, executives together with Sir Richard are mentioned to again the concept of an inventory to supply extra future alternatives to lift cash throughout the post-COVID restoration and past.
A presentation to Metropolis traders made in the previous few days is claimed to concentrate on Virgin Atlantic’s sturdy positioning to make the most of pent-up demand for worldwide journey.
Bookings on the important thing New York-to-London route are mentioned to have surged by 150% this month, though the business continues to hunt additional concessions from the Biden administration to open up journey to the US for totally vaccinated passengers.
Virgin Atlantic has additionally almost halved its workforce because the begin of the pandemic – a transfer that has helped to drive vital longer-term price financial savings.
Going public would carry Virgin Atlantic into line with a lot of its publicly traded friends, resembling British Airways’ mother or father Worldwide Airways Group, easyJet, Ryanair, American Airways and Cathay Pacific.
Between them, IAG and easyJet have raised billions of kilos to steer them via the COVID-19 disaster, though they’re prone to require additional funding on condition that many executives don’t consider pre-coronavirus ranges of demand shall be seen once more till 2024.
Virgin Atlantic just isn’t the one a part of Sir Richard’s enterprise empire which has felt the stress of the pandemic.
The UK arm of Virgin Energetic additionally got here near collapse after placing a restructuring deal to landlords, lenders and shareholders.
His Virgin Voyages cruise operation lastly launched into its maiden journey this week after greater than a yr of setbacks.
However, the billionaire tycoon has been buoyed by the efficiency on the New York inventory market of Virgin Galactic, which has soared in worth and enabled him to lift lots of of tens of millions of kilos to prop up struggling leisure and journey companies.
Final month, Sir Richard flew aboard a Virgin Galactic journey to the sting of house, days earlier than his even-wealthier rival, the Amazon founder Jeff Bezos, did the identical on a Blue Origin automobile.
Sir Richard is now within the means of taking Virgin Orbit public via a merger with a US-listed particular objective acquisition firm (SPAC).
A Virgin Atlantic spokesman mentioned the airline didn’t touch upon hypothesis.