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Virgin Australia Weighing Debt Financing Plan Ahead of IPO, Sources Say

  • Dividend recapitalization would return cash to buyout firm
  • Airline bought out of administration by Bain Capital in 2020

Virgin Australia Airlines Pty Ltd. is considering taking on new debt in order to hand cash to owner Bain Capital just months ahead of the airline’s prospective initial public offering, according to people familiar with the matter.

The nation’s second-largest carrier has asked investment banks to outline a potential so-called dividend recapitalization during interviews for prospective advisers on the listing, said the people, who asked not to be identified as the discussions were still confidential. The move would see Virgin issue debt ahead of the possible IPO and the proceeds would be used to pay dividends to Bain, they said.