Richard Branson's Virgin Atlantic is considering an initial public offering and a possible listing on the London Stock Exchange to reinforce the company's finances as it banks on a rebound in transatlantic travel, according to a Sky News report.
The Crawley, U.K., airline, which is 51% owned by Branson's Virgin Group, has been discussing a possible IPO with institutional investors and insiders said bankers at Citi and Barclays have been hired to oversee the listing, the report said.
Based on positive responses from institutional investors in their discussions, the company is likely to announce its IPO intention in the fall, the report said. An IPO would be the first time Virgin Atlantic has sold stock to the public since launching operations in 1984.
Branson would also likely give up control of the company under an IPO unless he elects to subscribe to new equity in the airline. Delta Airlines owns the remaining 49% stake in Virgin Atlantic.
Virgin Atlantic does not have an urgent need for funds, since it has adequate financing to get through the next few months, insiders said. However, Branson and other executives are reportedly open to the IPO idea to provide future funding opportunities as the airline industry recovers from the COVID-19 pandemic and beyond.
After Virgin Atlantic's transatlantic travel business was hit hard by the pandemic in 2020, the airline last September arranged a £1.1 billion (US$1.67 billion) rescue package, which included £200 million from Branson, a loan from hedge fund Davidson Kempner Capital Management and funding from existing creditors.
Branson's other ventures include his space tourism company Virgin Galactic (SPCE) - Get Virgin Galactic Report, which completed its first test flight on July 11, and his cruise company Virgin Voyages that launched the maiden voyage of its Scarlet Lady vessel on Friday.
Virgin Galactic shares on Friday closed up 5.8% at $33.37.