G+T’s reflections on ‘Australia’s most important’ IPO in recent years

It is, the firm said, the first significant private equity-sponsored company to come to market since 2021.

The relisting of the airline group follows its acquisition by Bain Capital in 2020 and subsequent revitalisation.

The IPO comprises, Virgin detailed, of an offer of 236.2 million fully paid ordinary shares at an offer price of A$2.90 per share, with the underwritten offering raising A$685 million to allow certain existing equity holders the opportunity to realise part of their investment in the company.

On completion, the airline went on, investors participating in the offer are expected to hold 30.2 per cent of shares on issue, with the remainder being held by existing investors, which include Bain Capital, Qatar Airways Group, Virgin Group, and Queensland Investment Corporation.

The move, G+T said, reflects renewed investor confidence in the Australian market’s capacity to support large-scale, high-profile and private equity-backed IPOs.

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Virgin Australia chairman Peter Warne said: “After making significant progress in Virgin Australia’s transformation and with the backing of leading global airline Qatar Airways Group as a strategic investor, we believe it is now appropriate for the business to transition to a publicly listed company.”

“This provides an opportunity for new investors to share in the success of Virgin Australia as the airline enters its next phase.”

Virgin said it currently expects that trading of shares on the ASX will commence on 24 June 2025, initially on a conditional and deferred settlement basis.

Since emerging from voluntary administration in 2020, G+T outlined, Virgin Australia has undergone a substantial restructuring.

Combined with the pace and complexity of the aviation sector and compounded by global market volatility triggered by, among other things, the US government’s “Liberation Day” announcements, the firm said it all “made for a transaction with a lot of potential hurdles”.

Partners Adam D’Andreti and Peter Cook led G+T’s team on the matter.

In a firm statement, D’Andreti said: “This IPO is a milestone for Virgin Australia and arguably one of the most important to emerge in the Australian market in recent years. Bringing a deal of this scale to market during a period of global economic and geopolitical uncertainty speaks volumes to the strength of the business and the depth of support behind it.”

Cook added: “Bain Capital took a courageous leap of faith in the business during the height of the COVID pandemic in 2020, rescuing in a short period from administration a significant national infrastructure asset. Through patience and provision of capital, Bain Capital revitalised Virgin Australia’s financial performance, allowing it to provide significant competition in the aviation market for the long-term benefit of Australian consumers.”

The result, he proclaimed, “is a testament to the power and benefit of private capital”.

“Notably, this transaction also reminds the market that an IPO exit route remains open for sponsors who can adapt and be flexible on timing, structure and price,” he said.

In conversation with Lawyers Weekly, D’Andreti reflected on what the IPO says about the current conditions for capital markets in Australia, with a new financial year around the corner.

“Notwithstanding the tumultuous backdrop, the ASX has recently hit new highs, and equity market volatility has substantially reduced since the US and China agreed a temporary stay on most key tariff measures,” he said.

So, he mused, “Virgin Australia’s IPO was, in a sense, very fortunately timed”.

“That being said, the very strong support for the IPO from institutional investors for what is a complex business in an ever-changing industry is a very encouraging signal that there is untapped demand for new IPO products in Australia (at the right price),” D’Andreti said.

“We expect this and some other IPOs currently in the market will be closely watched to see how they perform in the aftermarket and that will bear significantly on whether this momentum can continue into the back-half of 2025.”

Looking ahead to FY2025–26, Cook said that the looming challenges “have been well-ventilated”.

“Macroeconomic and geopolitical uncertainties, concerns about the implications of US tariff and fiscal policies on the US and global economy, concerns about whether the US and Australian equity markets are overvalued and, more specifically for IPOs, the ever-present debate about valuations and whether you need to compromise on valuation to have a successful IPO,” he said.

However, Cook added, there are also “many” opportunities.

“ASIC’s and ASX’s focus in 2025 on breathing life into Australian public markets by taking a fresh look at everything, from IPO processes and other rules and regulations is a long overdue recognition that Australia risks falling behind other markets that have gotten onto those reforms much sooner,” Cook said.

“There is a wall of capital ready to support IPOs and secondary raisings, which have a compelling equity story.”

“We are seeing renewed interest from companies who had previously only considered a US IPO to look at a potential dual listing on ASX, too.”

On the questions of what will set legal teams in this space apart moving forward as they advise clients on such listings, D’Andreti responded: “Deep market knowledge and experience, strong relationships with key regulators at ASIC and ASX, a strong recent track record advising on ASX IPOs and most importantly the ability to leverage that experience and recent knowledge to quickly get your client ASX-ready and guide the process through expeditiously to hit the IPO windows when they open.”

G+T’s team on the matter also included Sean Meehan, Kevin Zhou, Lucy Hall, Hayden Rayen, Catherine Wei, Meng-Yeow Lim, Maree Casey, Kevin Olson, Ben Bylykbashi, Muli Zhou, and Laura Worrad, as well as partners Alastair Corrigall and Louise Klamka.