Stake sold since it "has not performed to expectations".
In a release, Singapore Airlines (SIA) said it has agreed to sell its 49% stake in Virgin Atlantic Ltd to Delta Air Lines. Under the agreement, Delta will pay US$360 million in cash for Singapore Airlines’ entire shareholding in the UK-based airline group.
The agreement is subject to regulatory approvals being obtained in Europe and the United States. Subject to these approvals being secured, the transaction is expected to close in the fourth quarter of the 2013 calendar year.
Singapore Airlines acquired 49% of Virgin Atlantic in March 2000.
"The Airline had been evaluating strategic options for the stake for some time, as the investment has not performed to expectations and the synergies the parties originally hoped for have not materialised," said SIA, adding that the successful completion of the sale will result in a profit being booked in Singapore Airlines’ accounts.
Commercial arrangements between Singapore Airlines and Virgin Atlantic, encompassing codesharing, frequent-flyer programme ties and reciprocal lounge access, are expected to remain in place after the divestment.
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