Virgin keen to buy stake in Sun Air

Richard Branson's Virgin group is set to expand its airline interests by making a bid for the state-owned South African carrier Sun Air. Details of the offer, made in partnership with a group of local black business interests, are due to be released next week when the South African government announces the list of groups that have pre-qualified to bid.

About 10 bidders are thought to have expressed an interest in Sun Air, which was formerly the carrier for the independent homeland of Bophuthatswana and operates domestic services with a fleet of about five aircraft.

A Virgin spokesman said that if its bid was successful it was likely to emerge with a stake of around 20 per cent. The investment would be in line with a commitment Mr Branson gave last year to spend about pounds 100m building up its business interests in South Africa. Earlier this year it bid unsuccessfully for the country's first commercial radio licence.

Virgin Atlantic, Mr Branson's airline, operates six flights a week from London to Johannesburg and has an interline agreement with Sun Air to fly its passengers on to Cape Town and Durban. "We are very keen to take a stake in Sun Air," the spokesman said.

The Virgin bid is being made with the Bhekilanga consortium of six black empowerment companies. Providing the consortium has pre-qualified it will submit a non-binding offer and then a final offer. The South African government is being advised on the sale by BOE NatWest.