Virgin Blue denies $400m capital raising plans

Australian carrier Virgin Blue Airlines Group has stated that its board had not approved any capital management initiatives, rejecting speculation concerning a $400 million capital raising.

“Given the prevailing macro-economic conditions, Virgin Blue Airlines Group assesses capital management initiatives as appropriate, however the board has not approved any such transaction as has been reported,” the group said in a statement.

The carrier made the statement this week in response to a news report that indicated a $400 million deal was in the works.

Speculation about Virgin tapping the market for cash to steer its way through a severe downturn in travel has been brewing for weeks, according to reports filed by local media. 

Australian fund managers say they would be tempted to buy into Virgin only if it was able to secure a cornerstone investor to give them comfort about its longer-term future.