Virgin to receive $146M loan from Air NZ
By Paul McBeth
Air New Zealand and its fellow airline shareholders in Virgin Australia will provide one-year funding of $475.5 million, giving the Australian airline room to review its capital structure.
Melbourne-based Virgin's cornerstone shareholders -- Air NZ, Etihad Airways, Singapore Airlines and Virgin Group -- are each funding the new loan facility to let the airline review its mix of debt and equity capital.
They are also considering operational initiatives to boost Virgin's cashflow and profitability, the airline said in a statement.
The facility is subordinated to the group's existing debt and is on arm's length commercial terms from each of the shareholders in proportion to their stake in Virgin.
"The board is focused on optimising the group's balance sheet and capital structure to support the ongoing execution of its strategy and will lead a capital structure review," chair Elizabeth Bryan said.
"This review will ensure the Virgin Australia Group has the best capital structure in place to achieve its strategic goals and generate long-term growth and value for shareholders."
Air NZ's share of the loan is worth $146.5 million, it said in a separate statement.
Virgin's ASX-listed shares last traded at 35 Australian cents, while Air NZ was recently up 0.7 percent to $2.86.
NZN / Newshub.