Singapore Airlines - News Releases (2012)
SIA To Acquire Strategic Stake In Virgin Australia
CEO, Mr Goh Choon Phong
“This major development demonstrates the importance and strength of the partnership between our two airlines, and our shared commitment to an alliance that provides a wide range of consumer benefits.”
30 October 2012 - Singapore Airlines is to acquire a 10% stake in Virgin Australia in an agreement that will further strengthen ties between the two partner airlines.
The strategic stake will be acquired through a placement of new shares by Virgin Australia Holdings. Singapore Airlines will purchase 245.57 million shares at 42.88 Australian cents per share for a total consideration of A$105.3 million.
Under the subscription agreement, Singapore Airlines will have anti-dilution rights to maintain a 10% interest in Virgin Australia, in the event of an equity issuance from another transaction that is announced by Virgin Australia on 30 October 2012.
Australian Foreign Investment Review Board (FIRB) approval has been obtained for the share purchase, which is expected to be completed on 16 November 2012.
“This major development demonstrates the importance and strength of the partnership between our two airlines, and our shared commitment to an alliance that provides a wide range of consumer benefits,” said Singapore Airlines CEO Goh Choon Phong.
“Singapore Airlines fully supports the ongoing transformation at Virgin Australia, which has already resulted in a more competitive aviation market in Australia. With this investment, there is no doubt that Singapore Airlines and Virgin Australia intend to remain alliance partners for the long haul.”
Virgin Australia CEO John Borghetti added: “Singapore Airlines is an important alliance partner of Virgin Australia and we are very pleased to have their support as an investor. This investment leaves Virgin Australia with a strong and flexible balance sheet to fund growth.”
Singapore Airlines and Virgin Australia entered into a long-term partnership last year, encompassing codesharing, reciprocal frequent-flyer programme benefits and lounge access, co-ordinated schedules to provide seamless connections, and joint sales, marketing and distribution activities. Expanded codeshare ties are under discussion and details will be announced in due course.