Virgin Aus­tralia digs deep

Travel Bulletin - - STATE OF THE INDUSTRY -

Virgin Aus­tralia has tapped its deep­pock­eted share­hold­ers on the shoul­der, with Eti­had, Sin­ga­pore Air­lines, Air New Zealand and Virgin Group to pro­vide a new $425 mil­lion loan. The 12 month fa­cil­ity is on “arm’s length com­mer­cial terms” and aims to pro­vide the car­rier with “ad­di­tional flex­i­bil­ity in the short term”. The funds will bol­ster Virgin Aus­tralia’s fi­nan­cial po­si­tion, with the

com­pany yet to see the full ben­e­fits of its on­go­ing Virgin Vision trans­for­ma­tion pro­gram. It’s not the first time Virgin has sought ad­di­tional work­ing cap­i­tal, with a $350 mil­lion rights is­sue in 2013 fully sup­ported by the ma­jor share­hold­ers. VA chief ex­ec­u­tive of­fi­cer John Borghetti said the new $425 mil­lion fa­cil­ity would give space for a re­view to en­sure the group has a “cap­i­tal struc­ture that sup­ports its strate­gic ob­jec­tives”. An­a­lysts say the cash re­quire­ments of the busi­ness are in part a re­flec­tion of its hedg­ing poli­cies which have seen Virgin Aus­tralia un­able to fully par­tic­i­pate in the mas­sive de­cline in fuel prices.

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.