Virgin Australia is to proceed with its $350 million equity raising after the move received the green light from the Australian Takeovers Panel.
The Australian Shareholders Association had applied to the Takeovers Panel, arguing the equity raising had had been structured to concentrate control of the company in the hands of the foreign airlines.
It argued that the capital raising had been structured in a way to increase the control of Air New Zealand, Etihad and Singapore Airlines at the expense of other shareholders.
The Takeovers Panel disagreed and declined to make a declaration of unacceptable circumstances in relationship to the capital raising.
The Virgin Australia board is independent of the airline’s major shareholders who have not asked for - nor have - board seats.
It said that it considered that it is not against the public interest to decline to make a declaration of unacceptable circumstances.
Virgin Australia’s capital raising will see three of its four foreign shareholders - Air New Zealand, Etihad Airways, Singapore Airlines and the Virgin Group - lift their collective stake in the company from 62.6 per cent to up to almost 70 per cent.
ASA spokesman Stephen Mayne applied to the Takeovers Panel, arguing the equity raising had had been structured to concentrate control of the company in the hands of the foreign airlines.
Virgin welcomed the decision.
It said that the Takeovers Panel’s decision allows the Entitlement Offer to continue as planned on its original terms and timetable.
Qantas has also been lobbying the Federal Government to stop the capital raising arguing the Virgin is using the funding to continue a fare war.
Virgin argues that the fare war has resulted because Qantas has dumped capacity to defend its 65 per cent markets share policy
Virgin shares were off 0.3 cents to 38.2 cents at 7.45am.