Search

NEWS
AVIATION | Staff Reporter, Singapore
Published: 07 Dec 12
339 views


Delta eyes SIA's 49% stake in Virgin

One man’s meat is another’s poison.

According to Maybank Kim Eng, Singapore Airlines announced recently that they are looking to divest their 49% stake in Virgin Atlantic (VA), an investment they made for GBP600m some thirteen years ago.

Here's more from Maybank Kim Eng:

While the news itself wasn’t a big surprise, it was intriguing to see a wide range of offer prices quoted by news publications, from SGD200m (The Business Times) to ~USD1.2b (Bloomberg, CNBC).

Both quoted Delta as the alleged interested party. Our take: fair value is likely to be closer to SGD1b, and this could result in an attractive special dividend.

One man’s meat, another’s poison. SIA’s investment in VA has been undermined by Richard Branson’s unwillingness to accede control of the airline to SIA, as well as the inking of a Singapore-UK agreement allowing SIA to fly the trans-Atlantic route from Britain.

This transAtlantic route and prized landing slots at London’s Heathrow are exactly what Delta is after: a lucrative market for premium passengers.

Our view on Virgin’s worth: ~SGD1b. We did a simple comparison with International Airlines Group (IAG), parent of British Airways, Iberia and BMI, to make an educated guess on a fair value for VA’s business.

Sale could result in 8% special dividend yield. SIA has a muchvaunted net cash pile of close to SGD4b, which likely means any significant cash proceeds from a VA sale could be distributed to shareholders via a special dividend. SGD1b in cash proceeds would translate to ~SGD0.85 / share, or a potential 8% yield. Fundamentally, our HOLD call on SIA is maintained, still premised on a neutral outlook for the aviation sector. But things could start to look interesting for SIA.

Potential special dividend if cash sale goes through. Our VA valuation suggests an attractive special dividend should a cash sale be sealed. We do list two criteria for investors to watch for: confirmation of the transaction which is in-line or even exceeding our SGD1b estimates, and for the deal to be paid in cash. 



Sign up for our newsletter

 

Do you know more about this story? Contact us anonymously through this link.

Click here to learn about advertising, content sponsorship, events & rountables, custom media solutions, whitepaper writing, sales leads or eDM opportunities with us.

To get a media kit and information on advertising or sponsoring click here.

Tags: SIA's stake in Virgin, Delta

LATEST AVIATION JOBS »
  • No jobs posted on this category.
PRINT ISSUE »

Subscribe Now
Singapore singled out in Asia for weak M&A appetite

317 views

Is the KL-Singapore High-Speed Rail project still on the right track?

760 views

The changing taste of Asian art collectors bodes well for the Western art market

53 views

MOST READ EXCLUSIVES

Here are the credit card deals you shouldn't miss during the Great Singapore Sale 2015

Here are the credit card deals you shouldn\'t miss during the Great Singapore Sale 2015

The GSS begins today.

by MARIANNE ESTIOCO
29 May 2015 | 29423 views
 

Bosch’s cutting-edge regional HQ is one of the greenest buildings you’ll find in Singapore

Bosch’s cutting-edge regional HQ is one of the greenest buildings you’ll find in Singapore

It boasts an automated sun-shading system.

by MARIANNE ESTIOCO
7 Jul 2015 | 14322 views

This retired banker's fintech startup makes complicated wealth management a piece of cake

This retired banker\'s fintech startup makes complicated wealth management a piece of cake

Mesitis provides low-cost aggregated wealth reporting for all investors.

by MARIANNE ESTIOCO
25 May 2015 | 9449 views
 

Husband and wife duo ditch plum banking jobs to shake up Singapore’s HR scene

Husband and wife duo ditch plum banking jobs to shake up Singapore’s HR scene

This small start-up has global dreams.

by MARIANNE ESTIOCO
8 Jul 2015 | 9047 views

10 smart ways to spend your GST Vouchers

10 smart ways to spend your GST Vouchers

Regardless of how much you spend, aim to spend it well.

by KRISANA GALLEZO-ESTAURA
8 Jul 2015 | 7778 views
 

Cocoa Colony to open 12 more outlets in Singapore by end-2015

Cocoa Colony to open 12 more outlets in Singapore by end-2015

The cafe chain seeks to target the masses.

by KRISANA GALLEZO-ESTAURA
21 Jul 2015 | 6938 views

Check out this quaint co-working space that occupies 5 conservation shophouses

Check out this quaint co-working space that occupies 5 conservation shophouses

It has private offices, an events space, and even a beer garden.

by MARIANNE ESTIOCO
22 May 2015 | 4947 views
 

TAIGER’s office bids goodbye to claustrophobia-inducing cubicles

TAIGER’s office bids goodbye to claustrophobia-inducing cubicles

Walls and windows function as a big canvas.

by MARIANNE ESTIOCO
15 Jul 2015 | 4256 views

Hootsuite boosts its APAC team opening a new office in Singapore

Hootsuite boosts its APAC team opening a new office in Singapore

Its VP talks about the importance of the company’s culture in line with opening the new space.

by LEE ANNE BABIERRA
18 Jun 2015 | 3017 views
 

Get bitten by the travel bug in Skyscanner’s quirky Asia-Pacific headquarters

Get bitten by the travel bug in Skyscanner’s quirky Asia-Pacific headquarters

Meeting rooms are named after Asian tourist spots.

by MARIANNE ESTIOCO
5 Jun 2015 | 2974 views

Bye bye blurry video calls: Here’s a WebRTC startup that offers close to HD video quality using any device

Bye bye blurry video calls: Here’s a WebRTC startup that offers close to HD video quality using any device

Find out how they are building the next generation of web communications.

by LEE ANNE BABIERRA
2 Jun 2015 | 2368 views
 

HAITE Group launches its first aviation training center in Singapore

HAITE Group launches its first aviation training center in Singapore

It is the first major investment by a Chinese aerospace firm.

by KRISANA GALLEZO-ESTAURA
13 May 2015 | 2005 views

El Mero Mero founder says Mexican food is not just about tacos and burritos

El Mero Mero founder says Mexican food is not just about tacos and burritos

See how a former legal professional pursued his passion for food.

by LEE ANNE BABIERRA
26 May 2015 | 1790 views
 

This bold ad film tells you what happens when maids are not given their due day off

This bold ad film tells you what happens when maids are not given their due day off

‘Mums & Maids’ generated 5 million views in 5 days.

by KRISANA GALLEZO-ESTAURA
7 May 2015 | 1423 views

This handy app lets you book nearly any service under the sun

This handy app lets you book nearly any service under the sun

Find technicians, babysitters and more with Page Advisor.

by MARIANNE ESTIOCO
8 Jun 2015 | 1405 views
 

PwC Singapore launches its first Investment Fund Centre in Asia

PwC Singapore launches its first Investment Fund Centre in Asia

Expanding its presence in the asset management sector across Asian region.

by LEE ANNE BABIERRA
29 Jun 2015 | 1253 views

Singapore retailers turn to technology to boost productivity

Singapore retailers turn to technology to boost productivity

Shopping for the first child is always challenging for the parents.

by STAFF REPORTER
15 May 2015 | 1233 views
 

This app is out to prove that Singapore is anything but boring

This app is out to prove that Singapore is anything but boring

And Sugar helps SMEs in the process too.

by MARIANNE ESTIOCO
2 Jun 2015 | 1220 views

Hey, boss: This startup wants to be your all-around sidekick

Hey, boss: This startup wants to be your all-around sidekick

Alpha7 wants SMEs to join the Cloud.

by STAFF REPORTER
16 Jun 2015 | 1194 views
 

Get your head in the game: Testing challenges await the Internet of Things

Get your head in the game: Testing challenges await the Internet of Things

Industry experts share their concerns over security and testing standards.

by LEE ANNE BABIERRA
4 Jun 2015 | 1103 views

How do you like getting cash rebates when shopping online?

How do you like getting cash rebates when shopping online?

ShopBack introduces this concept in Southeast Asia.

by STAFF REPORTER
21 Jul 2015 | 1102 views
 

Need some help? This app lets you book a cleaner in five minutes flat

Need some help? This app lets you book a cleaner in five minutes flat

Sendhelper is the new breed of booking apps.

by MARIANNE ESTIOCO
26 May 2015 | 967 views

Leave your valuables unattended: This on-demand cleaning service offers $1m liability insurance

Leave your valuables unattended: This on-demand cleaning service offers $1m liability insurance

Book a reliable cleaner in seconds with Helpling.

by MARIANNE ESTIOCO
22 Jun 2015 | 947 views
 

Former strategy advisor reveals aspirations with his newest mobile app startup

Former strategy advisor reveals aspirations with his newest mobile app startup

Rediscover and fall in love with your city all over again.

by LEE ANNE BABIERRA
22 May 2015 | 918 views

Asian corporates face tough balancing act as sustainability issues mount

Asian corporates face tough balancing act as sustainability issues mount

Discover the changing face of Asian CSR.

by MARIANNE ESTIOCO
1 Jul 2015 | 553 views
 
close Don't Show Again

STAY INFORMED! Get our free weekly newsletter