Monday 23 September 2019

Ryan-backed low-cost airline Vivaaerobus pulls €165m IPO

Nick Webb

VivaAerobus, the low-cost Mexican airline co-founded by Declan Ryan, dramatically pulled its planned €165m IPO last week.

The fast-growing carrier had planned to sell shares on Mexico's stock market. The proposed Vivaaerobus came as it inked one of the world's largest deals for new aircraft.

"While we received significant interest from potential investors, the continued market volatility is not an optimal condition for an IPO," chief executive officer Juan Carlos Zuazua said last week.

The airline indicated that it will continue to look for other opportunities to go public. Vivaaerobus had been meeting with investors for the past two weeks and was planning to float last Friday. Barclays Mexico was the global co-ordinator for the company.

The prospectus for the company, filed with the Mexican stock exchange, revealed that Declan Ryan's Irelandia Aviation owned 46.1 per cent of the firm. Inversionistas en Autotransportes Mexicanos SA, the Mexican bus company known as IAMSA, also had a 46.1 percent stake. The airline generated an operating profit of €11m in the first nine months of 2013 off revenue of €157m.

The prospectus noted that prior carriers backed by Ryan's Irelandia Aviation generated average returns of 22 per cent after their share offerings. As well as helping found Ryanair, Ryan has backed Allegiant in the US and Tiger Airways in Singapore and Australia. Irelandia is also working on a low-cost airline in Colombia.

Vivaaerobus competitor Volaris Aviation floated in a $346m IPO last September.

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