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Two bidders still standing in battle for ownership of Virgin Australia
June 5th 2020
Administrators for Virgin Australia (VA) this week narrowed the list of potential buyers for the airline group to Bain Capital and Cyrus Capital Partners. Read More »
Deloitte joint administrator and restructuring services partner, Vaughan Strawbridge, said in a statement the pair was shortlisted from the five non-binding indicative proposals that were received.
"Both Bain Capital and Cyrus Capital Partners are well-funded, have deep aviation experience and they see the real value of the business and its future," Strawbridge said.
"The strong interest coming from all parties has generated the competitive tension we have sought that is important in a process such as this.
"We are in a strong place when it comes to delivering the best possible commercial outcome for all creditors and to see a strong and sustainable Virgin Australia emerge from this process."
Private equity firm, Bain Capital, and hedge fund, Cyrus Capital Partners, have the next few weeks to prepare binding final offers to buy VA. The airline company went into voluntary administration on April 21 with debts of about A$7 billion (US$ 4.8 billion) owed to about 10,000 creditors.
Strawbridge said it was still the administrator’s intention to have a binding agreement in place by June 30.
The Deloitte partner said the door was open for parties who did not make the final two, as well other individuals or entities, to be involved in any binding offer to buy the financially stricken airline.
"There also will be speculation entities associated with the parties that have not moved into this next phase, as well as others, could become involved in some capacity with the remaining parties," Strawbridge said.
"That will, of course, be a matter for them."
The Australian state of Queensland has indicated a willingness to be part of any bid in its efforts to keep VA’s headquarters in its Brisbane.
Its involvement could be an equity stake, a loan, guarantees or other forms of financial support, the state has said in recent weeks.
The founder of U.K.-based Virgin Group, Sir Richard Branson, has previously expressed a wish to remain associated with the Australian carrier.
"We will work with Virgin Australia’s administrators and management team, with investors and with government to make this happen and create a stronger business ready to provide even more value to customers, competition to the market, stimulus to the economy and jobs for our wonderful people," Branson said in a public letter in April.
Virgin Group owns about 10% of Virgin Australia shares. The final two bidders have links with Sir Richard. Bain Capital was an investor, alongside Virgin Group, in cruise company Virgin Voyages. Cyrus Capital Partners invested with Virgin Group in two airlines – Virgin America and recently collapsed UK-based Flybe.
