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Branson to float Virgin Blue in mid-2003
SYDNEY, Australia -- Australian airline investors will soon have an alternative to Qantas with British businessman Sir Richard Branson saying he plans to float his half of number two carrier Virgin Blue on the Australian Stock Exchange. "The idea is to bring the public into Virgin Blue sometime in the first half of next year," Branson said in an interview on Australian television. "It will be a stand-alone float of Virgin Blue and I think we have pretty well got everything in place to get that float away." The Sunday Times newspaper reported the float would have a likely value of up to 520 million pounds ($828 million). Since the demise of Ansett, Virgin Blue has become the prime competitor to the dominant carrier Qantas on mainline Australian routes. Qantas controls about 80 percent of the Australia market, but claims that because of "cherry-picking" by Virgin Blue, Qantas has a lot less than 80 percent of the profitable main trunk routes, such as Sydney to Melbourne. Branson is believed to have hired investment bankers Goldman Sachs for the float. Virgin Blue is half owned by Branson and the other half is owned by Patrick Corp, an Australian transport and logistics group. Branson, who owns larger Virgin Atlantic airline along with Singapore Airlines Ltd, was expected to announce the deal when his company unveils a 400 million pound order from U.S-based jet maker Boeing Co, said the Sunday Times. Branson said the last issue to be bedded down was the purchase of 30 to 40 new aircraft, but he did not specify whether all the aircraft were destined for Virgin Blue or also Virgin Atlantic, which he planned to fly to Australia in 2003. "The plane order is the last thing to lock up before the float," Branson said. Terminal dealThe move also comes after the discount airline and Sydney Airport Corp ended their long-running stoush over access to the former Ansett terminal at Australia's busiest airport. The two parties announced last Wednesday they had reached a long-term agreement which will see Virgin Blue passengers using the terminal, now known as T2, from early next month. As part of the agreement, Virgin Blue has agreed to withdraw its legal action against Sydney Airport Corp., which took control of the terminal on July 1. The airline claimed in August that Sydney Airport had failed to honor an April agreement on terms of access to the T2 terminal, which was used by Ansett until its final collapse in March this year. Sydney Airport rejected the claim, saying there was never a final deal with Virgin Blue. Reuters contributed to this report.
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