Singapore Airlines to acquire 10% of Virgin Australia
Singapore Airlines announced (30-Oct-2012) plans to acquire a 10% stake in Virgin Australia which will see ties between the airlines strengthen further. The strategic stake will be acquired through the placement of new shares by Virgin Australia Holdings. Singapore Airlines will purchase 245.57 million shares at AUD0.4288 per share for a total of AUD105.3 million (USD109 million). The agreement includes anti-dilution rights for Singapore Airlines to maintain a 10% share in Virgin Australia in the event of an equity issuance from another transaction to be announced by Virgin Australia on 30-Oct-2012. Australian Foreign Investment Review Board (FIRB) approval was obtained for the purchase which is expected to be completed on 16-Nov-2012. In 2011 Singapore Airlines and Virgin Australia entered into a long-term partnership which included codesharing, reciprocal frequent flyer programme benefits, coordinated schedules and joint sales, marketing and distribution activities. The airlines are planning to expand their codeshare agreement further, with details to be announced in due course. Expanded codeshare ties are under discussion and details will be announced in due course. [more - original PR - Singapore Airlines] [more - original PR - Virgin Australia]
Singapore Airlines: "This major development demonstrates the importance and strength of the partnership between our two airlines, and our shared commitment to an alliance that provides a wide range of consumer benefits. Singapore Airlines fully supports the ongoing transformation at Virgin Australia, which has already resulted in a more competitive aviation market in Australia. With this investment, there is no doubt that Singapore Airlines and Virgin Australia intend to remain alliance partners for the long haul," Goh Choon Phong, CEO. Source: Company statement, 30-Oct-2012.
Virgin Australia: "Singapore Airlines is an important alliance partner of Virgin Australia and we are very pleased to have their support as an investor. This investment leaves Virgin Australia with a strong and flexible balance sheet to fund growth," John Borghetti, CEO. Source: Company statement, 30-Oct-2012.