‘Considerable’ interest in Air NZ’s Virgin stake: Branson

Virgin founder says several airlines made approaches over a deal.

Virgin founder Sir Richard Branson has told Bloomberg there has been considerable interest from airlines in the Virgin Australia stake being sold by Air New Zealand [NZX: AIR].

Asked if Virgin Group, which owns 10% of the Australian airline through Virgin Islands company Corvina Holdings, was interested in buying the Air NZ stake, Sir Richard said there were discussions going on.

“We will watch with interest what happens. Whether or not we end up buying it, we’ll have to see,” he told Bloomberg News.

If it did not itself buy the stake, he said Virgin Group would love to have other airlines involved.

“There have been approaches from airlines that are considerable and could add a lot to Virgin Australia,” he said.

In March, Air NZ said it had retained Credit Suisse and First NZ Capital to review its 26% shareholding in Virgin Australia and announced the immediate resignation of its chief executive Christopher Luxon from the Virgin board.

Virgin Australia shares are trading around 27Ac, valuing the stake at about $A246 million ($263 million).

Air NZ chairman Tony Carter said in March that:  “Air New Zealand does not want a large minority equity position in Virgin Australia as it focuses on its own growth opportunities.”

Nine days earlier, Air NZ provided a $146 million loan facility to Virgin, alongside pro rata loan contributions from other Virgin shareholders Singapore Airlines and Etihad Airways.

Mr Luxon said Air NZ looked forward to continuing its alliance with Virgin on the Tasman route.

Follow NBR on Facebook, Twitter, LinkedIn and Instagram for the latest news and free on-demand audio from NBR Radio.

Login in or Register to view & post comments