Change is upon Virgin Australia, and its customers
Change is upon Virgin Australia, and its customers

Virgin Australia will remove all of its popular Embraer E-190 jets over the next three years and cut the numbers of its rather less popular ATR42 turboprops as it implements the capital restructuring and efficiency initiatives announced this morning.

It capital restructuring review highlights are:

A proposed fully underwritten A$852 million equity raising, in the form of a 1 for 1 non-renounceable pro-rata entitlement offer to shareholders at a price of A$0.21 per share (‘Offer’).

Singapore Airlines, HNA Innovation, Virgin Group, Nanshan Group and Air New Zealand have made binding commitments to take up their pro-rata entitlements. Singapore Airlines, HNA Innovation and Virgin Group have also made binding commitments to contribute to the sub-underwriting of entitlements not taken up by other shareholders.

Together, the proposed Offer and the previously announced proposed A$159 million placement to HNA Innovation will raise total gross proceeds of A$1,011 million in new equity capital to strengthen the Group’s balance sheet, improve earnings and cash flow and support new opportunities for growth.

The implementation of a program of new operational and capital efficiency initiatives to enhance the cash flow and capital position of the Group. Through these initiatives, the Group is targeting net free cash flow savings increasing to A$300 million per annum (annualised run rate) by the end of the 2019 financial year.

A media and analysts press conference will be held later this morning.

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