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| Virgin Blue expects a loss of up 165 million Australian dollars for the year ended June 30 and is seeking to raise 231 million Australian dollars ($189 million) by issuing new shares. | ||
Virgin Blue expects a loss of up 165 million Australian dollars for the year ended June 30 and is seeking to raise 231 million Australian dollars ($189 million) by issuing new shares, it said in a statement. The airline said its major shareholder, Richard Branson's Virgin Group, would support the capital raising.
"The operating environment over the last 12 months has been the most challenging in the airline's history," Virgin Blue said in a statement. "The strengthening of Virgin Blue's capital position combined with the current strategic initiatives will position the business to weather the current market environment."
Brett Godfrey, who co-founded the airline with Branson more than a decade ago to challenge dominant carrier Qantas Airways, will stay until the end of 2010 to help with the transition to a new CEO, Virgin Blue said.
The Brisbane-based airline will issue new shares at 20 Australian cents each, a 31 percent discount from the 29 cent closing price on Friday. Trading is halted on the Australian stock exchange pending the sale.
Proceeds will be used to strengthen the airline's balance sheet, improve liquidity and increase its financial flexibility to position the business for when markets recover, the statement said.
The company will not pay a final dividend for the just ended fiscal year. It made net profit of AU$98 million the year before.
(AP)