Virgin Australia scraps plans to go private, raising questions of stakeholder sale

Virgin Australia, Australia's second biggest airline, scrapped plans to potentially go private Wednesday, sparking concerns that a major Chinese shareholder, HNA Tourism, may be about to exit, and leading to a sharp fall in its share price. The surprise decision overshadowed the airline's best underlying half-yearly profit in a decade. Small shareholders have stuck with their investments in hopes the company would make good on plans to buy them out at a premium. Just 10% of Virgin's stock is openly traded on the share market but analysts watch its register carefully since it includes Richard Branson, with 10%, and Singapore Airlines, Etihad Airways and China's Nanshan Capital Holdings and HNA Tourism Group, which each hold about 20%. HNA, part of an aviation-to-services conglomerate, has been selling assets to alleviate severe financial strain after a $50b acquisition spree over two years sparked scrutiny of its opaque ownership and use of leverage. "Following discussions with the major shareholders the board has decided not to privatise the company," chairwoman Elizabeth Bryan said Wednesday. Bryan did not give a reason for the company's decision to reverse a move it flagged in 2017. The company meanwhile posted a 142% jump in H1 underlying profit and swung to an interim net profit for the first time in two years as more Australians chose to fly and fewer seats enabled it to charge higher fares. The airline added that it expected an improvement in underlying performance in H2 of fiscal 2018.<br/>