Retail investors cold shoulder Alliance Airlines equity raise

By Andrew Curran.

Retail investors have failed to embrace Alliance Airlines’ recent equity raise, with eligible shareholders only taking up a fraction of of the 9,915,132 new shares on offer, according to a September 16 Australian Securities Exchange (ASX) filing.

Last month, Alliance Aviation Holdings Limited, the publicly listed company that operates Australia’s Alliance Airlines, announced an AUD40 million (USD28.5 million) recapitalisation/equity raise programme involving both institutional and retail components.

Alliance Airlines has endured a financially torrid 18 months. Its share price has tumbled from just under AUD3 (USD2.14) at the start of 2025 to AUD0.55 (USD0.39) at the close of business on September 18, 2026. 

The airline said the equity raise would “enhance liquidity and balance sheet flexibility.”

Institutional investors back Alliance, retail investors do not

ASX filings show the company intended to issue just over 57.2 million new ordinary shares at AUD0.70 (USD0.50) each. Around 47.3 million (or approximately 82.5%) of those shares were taken up by institutional investors – entities such as banks, superannuation funds, government entities and insurance companies that invest money on behalf of their clients or members.

The remaining 9,915,132 shares were available to existing retail shareholders, who were given the option to buy one new share for every five shares already owned. Retail investors are typically individuals who buy shares on their own behalf through personal trading accounts.

These retail investors included Alliance’s board of directors, who told analysts in August that they’d be taking up some or all of their entitlements in the equity raise. But the bulk of Alliance’s shareholders are classed as institutional investors.

The airline’s top five shareholders include Qantas Airways Limited, Remco Properties Pty Ltd, Virburnum Funds Pty Ltd, KIOWA Two Thousand Corporate Trustee Company Limited and Perennial Value Management. Together, they own almost 59% of Alliance’s stock before the recent recapitalisation. Alliance has confirmed that Qantas and Virburnum had agreed to buy their full entitlements.

But the retail investors, perhaps punished by the recent precipitous slide in Alliance’s share price, were less enthusiastic.

According to the ASX filing, when the retail component of the equity raise closed on September 11, existing retail shareholders bought just 909,266 of the 9,915,132 new shares on offer, representing a take-up rate of 9.17%. Nonetheless, Alliance's chairman adopted a positive tone despite the disinterest from retail investors.

“I thank the many shareholders who took up their entitlements and applied for additional shares,” said Chairman James Jackson. “Their support remains vital to the company’s ongoing success.”

Alliance picks up the cash shortfall from its underwriter

Ordinary investors may be reluctant to tip any additional funds into Alliance Airlines, but the company still gets its money. The equity raise was fully underwritten by Barrenjoey Markets Pty Ltd. It and its sub-underwriters will take up the 8,995,866 shares Alliance’s retail investors didn’t buy. At AUD0.70 per share, this represents a cost of approximately AUD6.3 million (USD4.6 million) – only partially offset by the AUD2.5 million (USD1.8 million) in fees the investment bankers charged to run the recapitalisation programme.

Meanwhile, Alliance’s directors say they’ve turned the corner and the 2027 financial year, which ends on June 30 next year, should see better financial results than the 2026 financial year.

Cleaning up the balance sheet, selling non-core assets, consolidating the fleet and renegotiating a problematic wet-lease agreement with Qantas have helped convince the directors and its biggest shareholders that the worst is behind it.

Photo: Aero South Pacific.
Contact the writer: andrew@aerosouthpacific.com