Tuesday 24 April 2018

Ryan airline may raise €200m in planned IPO in 2015

Roisin Burke

Vivaaerobus, the Mexican budget airline backed by Declan Ryan, will revive its circa €200m fundraising float plans when the climate improves.

A new timeline for IPO is late 2015 or early 2016. "It's a matter for the board, but I would see it as having potential for float at that stage," said co-founder and adviser Conor McCarthy. "The new fleet will be in place, the timing could be right in terms of cost base and network by then."

The rapidly growing airline had planned to list on Mexico's stockmarket, but when competitor Volaris floated last year its share price dropped by 30 per cent and investors, who would be of similar profile to those that might buy into Vivaaerobus, were spooked.

"The best fundraising route is still IPO," said McCarthy. "The low-cost airline model is well understood by US investors. It's a question of course of getting a decent starting value."

"It was good timing in terms of fleet and there was every reason to bring in new investors, but Volaris had a torrid time when it went out and there was tapering off in emerging markets. Investors said 'we like your story but we're waiting for this to settle down'.

"Personally I think our story's going to get even better with the new fleet and Mexico [it's economy] on the rise again," said McCarthy.

The airline acquired €8.3bn list price worth of new aircraft as part of its move into new markets in Latin America. The new planes will reduce fuel burn by 12-15 per cent, a major reducer of costs.

McCarthy, an Irish aviation industry expert who helped found the business in 2005, has a stake of around 2.5 per cent.

Expansion into other Latin American markets is planned in partnership with major shareholder coach operator IAMSA, who sees the opportunity in a growing middle-class market who will increasingly want to fly instead of travel by bus.

Declan Ryan's Irelandia Aviation owns 46.1 per cent of the company while IAMSA has a 51 per cent stake.

Revenues are in the region of €160m.

Sunday Indo Business

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