Intercultural Business News

    Posted by Neil Payne on July 28th, 2009

Sir Richard Branson’s Virgin Group is set to inject A$80m (£40m) into the Australian budget airline Virgin Blue after the carrier warned of looming full-year losses.
Virgin Blue Holdings is carrying out a deeply discounted A$231m rights issue and cancelling its dividend in an effort to shore up a balance sheet battered by an operating environment that the company has called the most challenging in its 10-year history. Virgin Blue is predicting losses of between A$160m and A$165m for the 12 months to the end of June.

Strugling Airlinne receives Branson funding

Its short-haul operations are profitable and have increased their market share to more than 30 per cent but Virgin Blue’s long-haul division, V Australia, has been hit particularly hard by the recession and is forecast to drop to between A$30m and A$35m in the red this year, with another A$60m to A$65m lost on start-up and foreign exchange costs.

Virgin Group, which owns 25.5 per cent of Virgin Blue, has committed to buy 305 million shares itself and is also acting as sub-underwriter for 20 per cent of the retail component of the offer, which could raise its stake to 30.2 per cent.

Read More> The Independent

This entry was posted on Tuesday, July 28th, 2009 at 9:22 am and is filed under Australasia. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.