Richard Bransons sells his stake in Virgin Blue to Lang plc

[The Guvnor]

Branson sells Virgin Blue
Sir Richard Branson has sold his majority shareholding in low-cost airline Virgin Blue, in an effort to secure funds to prop up his key business Virgin Atlantic and new oversees venture Virgin Mobile USA. Transport and logistics group Lang Plc is reported to have paid around £111million for a 51% share of the company.

The much-anticipated deal was finally confirmed today after some weeks of speculation. Chris Corrigan, Lang's Chief Executive, told the Independent that he was pleased to announce that Virgin Blue was now a fully-fledged Australian operation and that he looked forward to competing with Qantas. He said, 'Virgin Blue is now the second airline in Australia and it's got a very unique and exciting business model.'

[lrjt24]

Careful!!! the deal is contingent on Virgin Blue acquiring all Ansett assets including terminals which is not very likely since the receivers have allready accepted the deal put up by two businessman in Oz for a significant higher amount than Virgin is ever wishing to fork up

[The Guvnor]

irjt45 - apparently not; it seems that Branson needs the cash rather badly and as Virgin Blue seem to fit rather well with Lang's stevedoring operations they've already done the deal - regardless of the fact it appears that they won't get the AN terminals.

Given that AN still seems to be grossly overstaffed (4,500 staff for 29 aircraft) and will be competing head to head with QF for the 'frills' market, I can't see the Fox-Lew operation surviving.

[LAVDUMPER]

I am surprised Dick allowed Lang to use the "Virgin" brand name - I thought Dick was concerned with potentially sullying the overall group image... I bet Dick sold the brand name for a few extra coin - anything to get the MONEY..................

Desparate times call for desparate measures...


Good luck to all involved!

[lrjt24]

Guv, afraid you are wrong please research your facts the following is a quote from FT


Lang agrees CONDITIONAL purchase of Virgin Blue stake
By Virginia Marsh in Sydney
Published: November 25 2001 15:45 | Last Updated: November 25 2001 16:09





Lang, the Australian transport and logistics group, has agreed to invest A$300m (US$155m) in a majority stake in Sir Richard Branson's Virgin Blue airline if it can secure some of the assets of Ansett, the carrier that collapsed in September.

Chris Corrigan, Lang chief executive, will meet Ansett administrators on Monday to try to persuade them to consider a bid that would include Ansett's airport and maintenance facilities.

However, the administrators have already agreed a provisional A$3.6bn deal under which the rival Tesna consortium - backed by two powerful Australian businessmen - would buy Ansett's core airline business as well as the airport terminals.

Mr Corrigan gave few details on Sunday of the deal with Virgin Blue, a domestic low-cost carrier established only last year. He said the proposal involved employing about 1,500 of Ansett's 17,000 staff, compared with 4,500 under the Tesna plan.

"There's not much point in expanding Virgin if it's going to not be able to get access to key assets that would allow it to expand rapidly," Mr Corrigan said.

Brett Godfrey, chief executive of Virgin Blue, claimed that the airline could increase its share of the domestic market from 8 per cent to 30 per cent through the tie-up with Lang.

Mr Godfrey said Virgin Blue had agreed to the Lang deal - it had planned to bring in a cornerstone investor and float next year - because its current facilities would reach maximum capacity in about 18 months and Ansett's terminals and other facilities would allow it to grow substantially.

"Lang come with financial might and they can do something we can't do. They can provide those [Ansett] terminals, which are very expensive," he said.

But he recognised it would be a battle to overturn the Tesna deal. "We are trailing behind another bid out there and it is late," he said.

However, the Tesna bid could yet founder if its backers' conditions are not met, although the consortium said last week it had ironed out most of its differences with the government and was confident it could go ahead.

[Magplug]

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