Etihad stake may be cut in half as Virgin share raising wraps up this week

by admin on July 13th, 2018

filed under 苏州美甲美睫培训学校

Etihad Airways is yet to decide whether it will back Virgin’s $852 million share raising Photo: Daniel MunozControl of  Virgin Airlines is headed for Asia amid speculation Middle East airline Etihad may see its holding in the Australian carrier halved.

Etihad is the largest shareholder in Virgin with a 21.83 per cent stake. However it has refused persistently to clarify whether it is to take up its entitlement to shares in Virgin’s $852 million raising, which closes on Wednesday.

Virgin is issuing shares at 21c each, and with its shares trading little moved from this price, the underwriters may be left with shares to take up as investors baulk at committing fresh funds to the company which has lost more than $500 million over the past three years.

Additionally, the latest raising will push to more than $2 billion the company has raised through the sharemarket, with the company’s market worth standing at around the amount it is seeking to raise in the latest issue.

The main underwriters to the latest raising include other Virgin shareholders such as Singapore Airlines and China’s HNA. Singapore may raise its stake to 25.99 per cent from the present 20.09 per cent while HNA will lift its holding to 19.99 per cent from 13.04 per cent.

Singapore Airlines already has the approval of the Foreign Investment Review Board to lift its Virgin holding clear of the 20 per cent takeover threshold.

Between them, Virgin’s three Asian shareholders – Singapore Airlines, HNA and Nanshan – could hold as much as 65 per cent of the airline’s shares once the raising has been concluded, while Etihad’s stake could fall to 11 per cent as Richard Branson’s Virgin Group emerges with 10 per cent, up slightly on the present 8.66 per cent holding.

Approached late last week, Etihad said it had yet to decide whether to commit fresh funds to Virgin in the latest raising, although it has repeatedly said it remains “fully committed” to its partnership with Virgin.

If Etihad passes up the opportunity to maintain its influence at Virgin, this will result in 65 per cent of Virgin’s capital being controlled out of Asia, with two Chinese groups holding a combined 39.8 per cent and Singapore the largest single bloc, at 25.9 per cent.

There has been ongoing speculation Etihad brought China’s Hainan Airlines in as an investor in Virgin Australia, to stymie a Singapore Airlines takeover.

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