Australian budget airline Virgin Blue Wednesday said it had raised 133 million dollars (110 million US) in a share offer to institutional investors aimed at countering expected record losses.
Virgin said it had completed an institutional placement of 105.2 million shares worth 21 million dollars and an entitlement offer of 560.4 million shares worth 112.1 million.
Another 491.5 million new shares will go on offer to the public in the retail component of the entitlement offer, which will raise an estimated 98.3 million dollars, the company said.
"The institutional entitlement offer and institutional placement were well oversubscribed, with strong demand from new and existing Australian and international institutional investors," Virgin said in a statement.
Existing shareholders accounted for most of the take-up, with 96 percent bought by current Virgin investors, the discount carrier said.
"The proceeds of this raising will significantly strengthen Virgin Blue's capital position and improve liquidity and financial flexibility, which we believe is prudent in the light of challenging conditions facing the airline industry," said chief executive Brett Godfrey.
Virgin has forecast net losses of 160-165 million dollars in the year to June, a sharp turnaround from last year's profit of 98 million dollars.
Godfrey, who is due to step down next year, has described the industry climate over the past 12 months as "the most challenging in the airline's history."
Shares in Virgin Blue were up 14.29 percent in the morning session at 28 cents, coming out of a trading halt related to the capital bid.