Etihad Airways to support Virgin Australia capital raising
By Steve Creedy Tue Jul 19, 2016
Gulf airline Etihad Airways has confirmed its continued support for Virgin Australia and will maintain its 21.8 per cent stake in the Australian carrier and a seat on its board.
Etihad confirmed on Wednesday that its board had endorsed a proposal to take up its pro-rata entitlement in Virgin’s $852 million capital raising due to close at 5pm the same night.
Estimates are that this will see it stump up as much as A$186m in cash.
“Etihad Airways is a long-term strategic investor and commercial partner to Virgin Australia, and remains fully committed to the partnership as a shareholder.’’ the airline said in a statement announcing it was taking up its pro-rata entitlement in the non-renounceable offer at 21c per share.
“As a result, the airline will retain its 21.8 per cent shareholding in Virgin Australia and its seat on the board of directors.
“Our comprehensive 10-year commercial agreement, which runs until 2020, is further evidence of our confidence in and support for Virgin Australia, and our commitment to the airline and Australia.’’
The capital raising, cost-cutting and fleet rationalisation at Virgin are part of a move to repair the airline’s balance sheet after an expensive restructure aimed at making it a serious competitor to Qantas.
Shareholders Singapore Airlines, Virgin Group, HNA and Nanshan Group have committed to the raising.
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