Virgin Australia bondholders submit rival buyout bid
Virgin Australia bondholders have submitted a rival deal to Deloitte to buy the embattled carrier out of administration, a spokesman said today.
Last month US investment fund Bain Capital emerged as the victorious bidder for the airline, in a deal worth an undisclosed sum.
Although the offer eclipsed proposals offered by Cyrus Capital Partners and Virgin’s bondholders, the latter group have continued to challenge the decision.
Under the Bain deal, it is unclear how much the airline’s bondholders, who are owned AU$2bn, will get.
In order to be ratified, it must be approved by 50 per cent of stakeholders both by value and by number.
One of the bondholders, Singapore’s Broad Peak Investment, has sought a court ruling giving it access to the details of the Bain deal.
In a statement, the group said that the bondholder pitch was “substantially the same” as its original offer last month.
That proposal, which was led by Broad Peak and Tor Investment Management, involved interim funding to allow Virgin to continue operating as well as the conversion of some creditors’ debts into equity worth around 69 cents on the dollar.
Creditors would also have the option to sell their shares for cash, according to a court submission.
Virgin Australia called in the administrators in April as the coronavirus crisis began to hammer the global aviation industry.
The decision to appoint an administrator came after Canberra elected to reject a plea for a AU$1.4bn loan to keep the flier alive.
Despite commanding a hefty share of the Australian domestic market, Virgin Australia’s debt pile reached AU$5bn before the airline appointed Deloitte.
Even before the crisis struck, the budget carrier had recorded losses for the last seven years.