Free shares worth $1000 for certain employees
Virgin Blue: Branson Won't Have Formal Board Role
SYDNEY (Dow Jones)--Australian budget airline Virgin Blue said Monday that it intends to list on the Australian Stock Exchange Dec. 8 after raising between A$501 million and A$558 million in gross proceeds from a public offering of shares.
The airline said in a prospectus that it has set an indicative price range for its shares between A$1.80 and A$2.25.
The offer includes new shares worth more than A$400 million.
But major investor Richard Branson's Virgin Group (VGN.YY) also will sell shares as part of the offer
As a result, Virgin Blue will own around 29.1% of the company when it makes its stock market debut.
Patrick Corp. (PRK.AU) will buy more shares just to keep its stake steady, and will hold around 45.9% on listing day. Virgin Blue employees will have around 3.2% of the company and new investors some 21.8%.
Virgin Group has undertaken to sell sufficient shares to ensure that at least 25% of Virgin Blue will be owned by investors other than itself and Patrick, but can choose to sell additional shares through the offer.
The final pricing of the offer also will be up to Virgin Group, along with the joint global coordinators after the close of an institutional offer.
A portion of the capital raising will go to Virgin Group. In addition, Virgin Blue said proceeds from the offer will help it pursue growth opportunities, enhance its capital position and facilitate an employee incentive program through share ownership in the company.
The retail offer is set to open Nov. 17 and close Nov. 28. An institutional bookbuild will be held between Dec. 3 and Dec. 5.
As a sweetener for employees, the airline is giving certain staff A$1,000 of new shares for free.
Newly appointed chairman Chris Corrigan, the chief executive at Patrick Corp., said the airline's key strengths include its relatively low cost structure, low fares, experienced management team and strong brand.
"Virgin Blue has already proven its ability to operate successfully in a competitive market and the directors are confident that this will continue in the future," said Corrigan.
The airline has a total domestic market share of more than 28% and wants to increase the frequency of services on existing routes as well as launch services on new business and leisure routes. The company also has plans to begin Pacific flights.
Richard Branson, who founded Virgin Blue in 2000, said Virgin Group plans to maintain a "significant stake" in the business as part of its long-term global airline strategy.
Branson has been given the title of "life president" of Virgin Blue but won't take up a formal board role due to "other global commitments."
Two other Virgin Group directors, Stephen Murphy and Patrick McCall, will be on Virgin Blue's board.
===========================================