Posts Tagged ‘IPO’

Virgin Cancels IPO Offering

February 14, 2019

Virgin Trains USA has abruptly canceled plans to make an initial public offering, opting instead for what it termed “alternative financing sources.”

Virgin had said it planned to sell 28.3 million shares of common stock, which was expected to go for between $17 and $19 per share.

The IPO was to have been launched the week of Feb. 11 and was expected to raise $510 million.

Money raised from the IPO was to be used for expand service into Orlando and Tampa.

Formerly known as Brightline, Virgin has for more than a year operated daily intercity rail passenger service between Miami and West Palm Beach, Florida.

In a statement, about the IPO cancellation, Virgin did not indicate if it would consider another IPO in the future.

Most of the stockholders of Virgin Rail are private equity funds affiliated with Fortress Investment Group.

A news media report quoted a follower of Virgin as saying that the IPO can scrubbed because the company “concluded that it could not achieve the valuation it sought in an IPO: ‘It was a combination of [investor] appetite and people saying they’d be interested if it was private.’”

Had the IPO been executed, those buying stock in Virgin would had no more than a 2 percent stack in the company.

Documents filed with the U.S. Securities and Exchange Commission show that Virgin Trains has had discussions about raising up to $2.3 billion in debt and its plans to expand are contingent on it having the funds to acquire certain land rights.

Virgin faces a June 2019 deadline to raise more than $1 billion in construction financing to avoid losing a deal with the Greater Orlando Aviation Authority, which operates Orlando International Airport.

The airport plans to provide land for a station, storage facilities and tracks. Virgin has said it will may seek an extension of that deadline.