US-based private equity firm Bain Capital, owners of Virgin Australia (VA, Brisbane International), has confirmed issuing RFPs to several investment banks as it eyes an IPO to relist the airline it acquired in 2020. The move comes as Virgin Australia roars back to financial health after Covid-19.

The Australian Financial Review is reporting that Bain has retained capital markets advisory firm Reunion Capital and that they sent out RFPs to "eight or nine" investment banks on January 16, 2023. Reunion Capital is acting as Bain's independent financial advisor. The final list of banks taking part in any IPO will be shortened, but favoured names on the RFP list include Goldman Sachs, Morgan Stanley, and UBS, who all have established relationships with Bain Capital and the airline following its restructuring and resale process. Goldman Sachs acted as Bain's advisor during the Virgin Australia acquisition, Morgan Stanley advised administrator Deloitte on the sale, and UBS advised Virgin Australia before it went into administration.

“In the coming months, we will consider how best to position Virgin Australia for continued growth and long-term prosperity," said Bain Capital's Sydney-based partner, Mike Murphy, in a rare public statement this week. "While there is currently no set timetable, at some point in the future, if any IPO does happen, Bain Capital would welcome public market investors joining us as shareholders in what is a great Australian company."

Virgin Australia entered into voluntary administration in April 2020. The restructuring and resale process was handled by Deloitte. Bain beat out other parties, including Oaktree Capital Management, BGH Capital and Cyrus Capital, to buy the airline later that year in a deal that involved an upfront cash payment of AUD572.7 million (USD398.2 million) and a total financial commitment of AUD3.5 billion (USD2.43 billion).

Virgin Australia posted a loss of AUD76.8 million (USD53.4 million) in the 12 months to June 30, 2021, and a loss of AUD386.7 million (USD268.9 million) in the 12 months to June 30, 2022. However, the airline is tipped to report an EBITDA profit of around AUD750 million (USD521.44 million) this financial year. The 2020 restructuring process allowed Virgin Australia to jettison most of its AUD6 billion (USD4.17 billion) debt. Reportedly there is now no bank debt, and the only liabilities are for aircraft leases. The fleet was downsized and streamlined to one type - B737-800s, although the first of twenty-nine MAX are due to start arriving this year.

Murphy said Bain would retain a stake in the airline and will sell down tranches over time. "It is Bain Capital’s current intention to retain a significant shareholding in a future IPO of Virgin Australia," he said. The investment banks are expected to make their pitches to Bain Capital in February.