to reduce stake in listed Virgin - 8th December
(Credit: The Sydney Morning Herald)
Virgin Blue will finally list on
the Australian Stock Exchange at midday today,
after a float was first mooted more than three
years ago, with founder Sir Richard Branson confirming
over the weekend he will sell down further his
stake in the airline.
the strong response to Virgin Blue's initial public
offering among retail and institutional investors,
Virgin Group said Sir Richard had agreed to cut
his $670 million, or 29.1 per cent stake, to 25.1
per cent. In effect, the move boosts the percentage
of the airline's shares available to the public
to about 30 per cent of the operation.
institutional investors already taking up two-thirds
of the offer, which Virgin said was more than
10 times over-subscribed, the airline has drastically
scaled back its allocation to individual investors.
92 per cent of Virgin Blue's 3000 staff will get
everything they applied for, the airline's so-called
v-mail or "valued customers" will receive
the minimum $5000 shares they applied for - but
only 50 per cent of any additional amount above
retail investors will receive only 25 per cent
of applications above $5000.
Sir Richard's move consolidates the grip over
the airline held by 45 per cent shareholder Patrick
Corp, the logistics group has still failed to
disclose whether it has any plans to increase
its stake, or even reshuffle the airline's management.
the final price in the Virgin offering being set
at the top of the $1.80 to $2.25, the airline's
shares will be valued at 15.4 times forecast earnings,
compared to Qantas, which is valued at about 11
times expected earnings.
is forecasting a full-year net profit of $150
million, compared to the previous year's $108
million. But the major challenges will be to maintain
its growth momentum while fending off Qantas's
new low-cost carrier, Jetstar.
Virgin subsidiary Pacific Blue set to commence
flights between Christchurch and Brisbane in late
January, and Melbourne and Christchurch in March,
the airline is also seeking to fly to Vanuatu,
New Caledonia and Fiji.
talk the airline could face an uphill battle getting
access to Fiji, thanks to opposition from the
part-Qantas-owned Air Pacific, Vanuatu has expressed
strong interest in attracting Virgin flights and
Port Vila only being serviced by five flights
a week from Sydney, three from Brisbane and two
from Auckland, Airports Vanuatu has expressed
interest for an airline to fly services from Melbourne,
Cairns, Wellington and Christchurch.
analyst Stephen Wood said one major factor that
would help Jetstar on the cost front after its
proposed launch next May will be the tighter seating
configuration on its yet-to-be-delivered Airbus
Jetstar's seat pitch (distance between each seat)
at 76cm, compared to Qantas and Virgin Blue's
81cm, Mr Wood said the airline would have the
potential to lift its available seat kilometres
(ASK) per plane.
On Branson - QANTAS-VIRGIN BLUE SHARES! - April