Virgin bidders down to two in days, says administrator

VIRGIN AUSTRALIA B777=3ZG VH-VPF (CN 37940)

Virgin’s administrator has confirmed he intends to whittle bidders down from four to two by “early next week” after a second deadline passed on Friday afternoon. It comes as both The Sydney Morning Herald and The Australian Financial Review report that Brookfield Asset Management has re-entered the race after withdrawing earlier on. The final four interested parties are private equity firm BGH Capital, US aviation company Indigo Partners, New York investors Cyrus Capital Partners, and Boston investment company Bain Capital. The state of Queensland, which earlier confirmed its interest, has still yet to show its hand ahead of the final mid-June deadline. On Friday afternoon Deloitte’s lead administrator, Vaughan Strawbridge, said his team has held nearly 100 meetings with bidders, unions, governments and stakeholder groups since the last deadline two weeks ago. He said all four were “well-funded parties” with “significant aviation experience”. “The competitive tension that has resulted from the process conducted to date confirms that all the parties have a genuine interest in the future of Virgin Australia, and see real value in the business, despite the uncertainty about when travel restrictions will be lifted,” said Strawbridge. “There is some speculation out there around what dollar value bidders might be placing on the business. This is just speculation, and we won’t know what that value might be until binding offers are required in mid-June. “This next phase, which will include further engagement with stakeholders and aircraft financiers as they seek agreements on future terms ahead of binding bids being received, will be just as intense and defined by an ongoing focus to deliver the best possible commercial outcome for creditors, and see Virgin Australia restructured and out of administration as a strong and sustainable airline.” Earlier, two newspapers reported that former entrant Brookfield had re-entered the race, something that the SMH speculated could lead to legal action from the four finalists. “It would just be ridiculous,” the source said. Australian Aviation previously reported that the TWU met with the government’s Virgin representative, Nicholas Moore, and told him this week that attempts to sell the business are being impeded by lack of clarity over whether or not there will be federal help. Unions representing the airline’s employees – who together account for 9,020 of the total number of creditors and are owed $451 million – told the media later that a lack of reassurance means serious bidders are “trying to crunch numbers in the dark”. National secretary Michael Kaine added afterwards that interested parties “don’t know when the airline might be able to get back in the air because of state and federal restrictions and they don’t know if there will be any financial assistance. This means it is almost impossible to put together a plan for Virgin”. 

VIRGIN AUSTRALIA ATR 72-212 AND B737-8FE

Sources close to Cyrus' bid who spoke on the condition of anonymity to discuss confidential matters said if successful the fund would cut some regional routes from Virgin's domestic network but otherwise continue flying between capital cities and major regional centres. International flying would gradually return as demand recovers from COVID-19, with a new fleet of fuel-efficient Boeing 787 Dreamliners to replace Virgin's Boeing 777s and Airbus A330s within the next five years. Virgin would keep most of its 75 Boeing 737s for domestic flights but other aircraft types - including eight A320s, 14 Fokker 100s and 14 ATR72 turbo-propeller planes - would likely be cut, sources said.

Story taken from but here with additions
https://australianaviation.com.au/2020/05/virgin-bidders-down-to-two-in-days-says-administrator-83682/