Hungary's Wizz Air revives bid to list in London

By bne IntelliNews May 23, 2014

bne -

 

Hungary's Wizz Air Holdings announced on May 22 that it is to revive plans to conduct an IPO on the London Stock Exchange in June. Central and Eastern Europe's biggest budget airline hopes to raise around $200m through the sale of new and existing shares.

The capital raised in the float, which will be run by by Barclays, Citi and JP Morgan, with Nomura acting as lead manager, will be used by the airline to expand routes in CEE and further to the east. That will see it chasing underserved markets with a growing appetite for flying, rather than fighting for a European market still in the doldrums.

Hungarian flag carrier Malev was one of several European airlines to bite the dust during the crisis when it folded in 2012. A combination of the economic slowdown, price pressure from budget carriers, raised fuel prices and EU resistance to state aid still has many national airlines on the edge. 

"We look forward to building on our success to date as we leverage opportunities both in our current markets, new markets in the Central and Eastern European region and further East, many of which have significantly higher GDP growth forecasts than the rest of Western Europe and whose propensity to travel by air can be stimulated and driven by the low air-fares we offer," said CEO Joozsef Varadi in a statement.

The collapse of Malev allowed Wizz Air to swiftly step in to boost its capacity at Budapest airport, and the struggles of flag carriers in the Baltics, Poland and Czech Republic have only strengthened its hand. Wizz Air has a market share of 38% in CEE, the company said. It currently has a fleet of 46 Airbus planes, and saw turnover grow 19% to just over €1bn last year. 

"We will continue to grow the business. New markets can be stimulated," Varadi told Reuters. The company plans to expand its fleet to 82 planes by the end of 2017, as it eyes consolidation in the sector. "We expect more consolidation in the market. It is hard to say when and where but we expect consolidation and we want to be able to act," the CEO stated. 

Wizz Air said it also plans to use the money to strengthen its balance sheet. Existing shareholders, including private-equity firm Indigo Partners, will pare their stakes to around 50%, Varadi told the Wall Street Journal. Indigo will remain the largest shareholder.

The CEO also suggested the IPO will help reduce borrowing costs. The size of a planned secondary offering hasn't been set, he added. Wizz Air offered no details on the number of shares it plans to sell in the IPO, nor any guidance on pricing.

A float has been on the cards for some time, but has struggled to take off due to market conditions. Having apparently decided to bypass the Budapest bourse to list in London, the airline was reportedly due to make an IPO last summer, but the sale was quietly put on the back burner.

Related Articles

UK demands for EU reform provoke fury in Visegrad

bne IntelliNews - The Visegrad states raised a chorus of objection on November 10 as the UK prime minister demanded his country's welfare system be allowed to discriminate between EU citizens. The ... more

Czech food producer Hame seen next on the menu for Chinese giant

bne IntelliNews - Following a smorgasbord of acquisitions in late summer, China Energy Company Limited (CEFC) is eyeing yet another small Czech purchase, with food ... more

INTERVIEW: Babis slams coalition partners, but Czech govt seems safe for now

Benjamin Cunningham in Prague - Even as the Czech governing coalition remains in place and broadly popular, tensions between Prime Minister Bohuslav Sobotka and Finance Minister Andrej Babis remain ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss