Airline Virgin Blue Holdings Ltd
(ASX:VBA) has today launched a fully underwritten equity raising to raise around $231.4 million to improve liquidity and provide increased financial flexibility.
The raising will be conducted via an institutional placement and entitlement offer at 20 cents a share.The company says it expects to report a loss of $160 - $165 million for fiscal 2009.
Virgin says that the key drivers of the business - capacity, demand and fuel - remain volatile. However the company expects its result in fiscal 2010 to be breakeven with a positive group cash inflow.
CEO Brett Godfrey says the company has invested $850 million in the business this fiscal year with the launch of 22 new routes and achieved sustainable cost reductions throughout the business.
Mr Godfrey says these initiatives along with the proceeds of the capital raising and Virgin’s new code share agreement and planned joint venture with Delta Air Lines, will ensure the company is well placed to move quickly to participate in the upside as markets recover. And in other news Mr Godfrey announced that he will retire from the role of CEO next year.
Virgin Blue’s 2008 net profit more than halved from its high in 2007 of $215.8 million.
