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Summary
- UK-based airline Virgin Atlantic is considering a potential public listing in London stock markets.
- The move is expected to boost the company’s financial standing as it was haemorrhaging capital due to being severely affected by the pandemic.
The UK-based and Sir Richard Branson owned airline, Virgin Atlantic Airways, is considering a possible initial public offering (IPO) on the London stock market in order to raise capital after the airline was severely hammered by the ongoing pandemic, according to media reports.
According to a Sky News report, the airline has been holding talks with institutional investors about going public, wherein investors have responded positively. Moreover, investment banking majors Citi and Barclays (LON:BARC) have been hired by Virgin Atlantic as its investment advisors for the potential listing.
Moreover, the airline may announce its IPO plans by autumn, as per the Sky News report. The report comes after the airline recently raised up to £160 million in recovery financing as part of the company’s goals to strengthen its balance sheet.
Sir Richard Branson is a majority shareholder of the privately held company, owning up to 51 per cent controlling stake in the airline, while the remaining 49 per cent is owned by US based airline Delta Airlines Inc. The IPO will thus reduce Sir Branson’s majority stake in the company for the first time.
Virgin Atlantic Airways’ financial performance
Virgin Atlantic, which was founded by Sir Richard Branson in 1984, has been among the worst affected airlines in the UK due to the pandemic and the possible public listing is expected to help boost its financial position.
The airline recently announced that its pre-tax loss in FY 2020 stood at £659 million due to a sharp drop in passenger numbers by about 80 per cent in the fiscal.
The airline has undertaken several wide ranging and aggressive cost cutting measures in order to withstand the covid-19 related headwinds. Virgin Atlantic has cut about 41 per cent of its employee staff and also retired some of the airline’s older aircraft early as part of the cost cutting initiatives.
Also Read: 5 IPOs that made a bumper LSE debut in 2021
How to buy Virgin Atlantic stock for its London IPO?
Virgin Atlantic shares can be bought in the following two ways for investors based in the UK, either by investing directly through the company or via a stockbroker.
Direct investment in IPO
Opting for direct investment into the IPO is not very common for retail investors as companies usually open direct investment to institutional investors due to their ability to sell a huge number of shares in a single transaction, whereas investment levels made by retail investors are typically much smaller.
However, if Virgin Atlantic opts to open investment to retail investors, an investor can submit an application to the company via their website or phone, listing the number of shares they wish to purchase.
And investors can receive their investment once the company’s pre-IPO reconciliation is concluded.
Also Read: IPO Watch: 7 major upcoming London listings
Invest via UK stockbroker
This is the more common method for retail investors seeking to invest in an IPO. They can invest using a UK stockbroker, which has direct access to the Virgin Atlantic IPO, and state the amount one wishes to invest based on the information available regarding issue price and the number of shares available.
A retail investor, must therefore, identify a UK stockbroker, register their interest in investing in the IPO on the broking site and open an account with the broking firm. Once the investment is made, the broker will distribute the shares to the investor, thus granting access to the shares.
