Etihad Retains 21.8% Stake in Virgin Australia and Board of Directors Seat
28th Jul 2016
Middle Eastern carrier Etihad has retained its 21.8 per cent stake in the second largest airline in Australia, Virgin after it accepted the pro-rata cash for more shares deal announced by VA in June.
In a statement, a spokesperson for Etihad said the following:
"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 Etihad Aviation Group board has endorsed a proposal to take up its pro-rata entitlement in the Non-Renounceable Entitlement Offer for new shares in Virgin Australia which closes at 5:00PM AEST (Australian Eastern Time) today."
The spokesperson continued:
"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 of Virgin Australia and our commitment to the airline and Australia."
In case Etihad had decided not to take Virgin Australia on its offer, it would have likely seen its stake in the Australian-based carrier halved in twain when it comes to share of equity, particularly after the conclusion of the fully underwritten $852 million cash for equity rising.
Earlier this year, at the end of March, Air New Zealand flagged a full or partial sale of its stake in Virgin Australia Holdings. Air NZ later sold the stake to Nanshan Group from China, which now, together with HNA Group holds a 40 per cent in the Australian airline. This was after several potential buyers, Qatar Airways being one of them, ruled out the possibility of buying Air New Zealand's stake.
Other shareholders in VAH, apart from Etihad (21.8 per cent), HNA Group, China (20 per cent) and Nanshan Group, China (20 per cent), include Singapore Airlines with 20.1 per cent, Virgin Group with 8.7 per cent, while Air New Zealand has retained 2.5 per cent stake in the carrier.
Major shareholder Singapore Airline has recently dismissed the rumours that it will bid for control in Virgin Australia.