View Full Version : Singapore buys another 10% of Virgin

26th Apr 2013, 00:40
This announcement slipped through with hardly a mention. Somebody thinks Virgin is worth investing in but the share price hardly moves?

Goat Whisperer
26th Apr 2013, 01:58
was bought off market, private transaction between SIA and Virgin Group. 48c per share.

26th Apr 2013, 02:39
Branson does very well out of SIA.

In 1999, Branson sold 49% of Virgin Atlantic to SIA for SGD1.8 bil. In 2012, SIA sold its stake for SGD446 mil - writedown of 75%. In 2000, Branson started Virgin Australia for A$30 mil. In 2013, SIA buys part of Branson's stake of Virgin Australia valuing his stake at A$250 mil.

Anyhow, quite a few interesting articles on this. Eg

Cookies must be enabled. | The Australian (http://www.theaustralian.com.au/business/opinion/singapores-virgin-swoop-hits-nerve-at-etihad/story-fng7vg0p-1226628992704)

How this transaction would unnerve Etihad

Virgin deal a headache for Borghetti, and for Qantas (http://www.smh.com.au/business/virgin-deal-a-headache-for-borghetti-and-for-qantas-20130424-2if5g.html)

Now for the Borghetti juggling act (http://www.smh.com.au/business/now-for-the-borghetti-juggling-act-20130424-2if23.html)

Borghetti's juggling act dealing with NZ, EY and SQ as shareholders

I still think QF is getting more out of EK for free, than SQ is getting out of VA for however much it is they paid for them altogether ($250 mil?)

26th Apr 2013, 02:48
Well with SQ at 19.9%, NZ and 19% and EY at 9%, at least we know VA can never fail. If VA ever needs a bailout, it will be indirectly the citizens of the UAE, New Zealand and Singapore who will provide the necessary funds, saving the Australian government having to impose that $10 per ticket tax when AN went bust!

Further, it seems that in the first stake SQ bought for $100 mil, VA just took that money to buy out Tiger Australia and Skywest. SQ, VA and Tiger say the deals were all separate, but the announcements for the first buyout happened all took place on the same day, and SQ increasing its stake in VA took place a day after the Tiger Australia transaction was approved by the ACCC.

It will be interesting to see how Borghetti balances the requests of SQ, EY and NZ. As I think one commentator in the SMH said, VA's partners need VA, and VA needs their partners, but their partners (SQ EY NZ and DL) absolutely do not need each other.

Bad Hat Harry
26th Apr 2013, 03:50
Almost every language has an expression that states "Don't Crap Where You Eat..
I don't think any of VAs partners will do that.If they are smart enough to invest in Borghetti then they are smart enough not to rock the boat

26th Apr 2013, 09:08
Just need them to lend VA a couple 777s now.

28th Apr 2013, 05:34
OK, back on topic.

Probably a given that VA would need to go looking for investment given the enormous expense required to bring the ATR fleet up to the now projected 35 aircraft, and the huge amount needed to produce a profitable TT OZ.

Something to bare in mind though, some of the players are coming close to the ownership minimums required for a takeover bid! It may be all hugs and kisses at the moment, but the price to pay for all this cash (still well short of what's required I might add) seems to be the risk of a loss of control.

On the subject of TT, if VA choose simply redeploy the existing fleet off the trunk routes and onto the leisure market, at least for the short to medium term, then I think it's safe to say that a movement to profit for that entity, may be some time off.

Challenging times indeed.

28th Apr 2013, 07:03
Players at 20% can creep 3% every 6 months...
but the issue with Virgin now is there is almost no stock to buy.

between Branson, Singapore, Air NZ and Etihad almost two-thirds of the stock is in private hands and doesn't trade.

And with each of those parties having different strategic objectives for Virgin I suspect a takeover is unlikely and disputes at the board table very likely.

I think the greater question is with all that foreign ownership, why is Virgin able to operate an Australian registered aircraft on international flights....
(they have used a 'structure' to do this)