Virgin Australia to Buy Back Frequent Flyer Stake
Virgin Australia has entered into an agreement to buy back the 35 percent of its frequent flyer business owned by Affinity Equity Partners.
In a stock exchange submission, Virgin confirmed it had signed a term sheet with Affinity to buy back the stake for AUD$700 million (USD$$479 million).
Private equity group Affinity acquired the stake in 2014 for AUD$335 million.
The airline said the transaction is subject to conditions including funding and Australia's Foreign Investment Review Board approval of the deal.
The acquisition will give Virgin Australia 100 percent of its frequent flyer business, one of the bright spots of the group, reporting pre-tax earnings of AUD$122 million for the year to end June 2019.
Overall, Virgin Australia Group reported a AUD$315.4 million net loss for the same period.
Completion of the transaction is expected to occur before the end of the year.