The peccadillos of Virgin's prospectus

It might've been sly of private equity savages Bain Capital to release the prospectus for its upcoming float of Virgin Australia at 12:30pm on the Friday before a long weekend, or maybe it was happenstance.[[ I say marginally, because I suppose they could've dropped it at 4:59pm.]] 

The AFR and The Australian were straight onto the epic bucks finally being strewn around Virgin's executive floor (and board room) at Brisbane's South Bank. 

Retail and institutional investors are being offered 30 per cent of the airline, with Bain selling its stake down to 40 per cent, Qatar Airways maintaining its 23 per cent position and the "employee" share pool increasing slightly to 8 per cent – within which lurks the ongoing shareholding of former CEO Jayne Hrdlicka.[[In 2024, Virgin effectively paid dividends on unvested shares held by management, to the tune of $9 million.]]

Never fear – her successor Dave Emerson has been granted share rights (some of them still subject to performance conditions) equivalent to 0.8 per cent of the company. Those are worth a positively Joycean $19 million. He also lands a one-off $1.35 million "transaction bonus" in cash.

Virgin's new shares will hit the ASX boards later this month at the issue price of $2.90, giving it an equity valuation of $2.3 billion. 

Not a dollar of the $680 million float proceeds will be re-invested in the airline. They'll go straight back to Bain, adding to the circa $1 billion it has already taken in dividends and capital returns and the undisclosed sum (which had to be north of $500 million) in last year's sell-down to Qatar. That's at least $2.2 billion back from its original $730 million cheque and, as mentioned, Bain still owns 40 per cent of the company.[[Bain has also extracted another $100 million from Virgin in "advisory services".]]