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Bain Capital makes winning bid for Virgin Australia
June 26th 2020
Bain Capital has emerged as the winner in negotiations to acquire Virgin Australia (VA), administrators for the financial struggling airline, Deloitte, said today. Read More »
In a regulatory filing to the Australian Securities Exchange (ASX), Deloitte said it had signed a sale and implementation deed with Bain Capital "which will result in the sale and recapitalisation" of VA and its subsidiaries.
The statement said no return to shareholders was anticipated and it was not possible to determine the estimated return to creditors at this stage.
"However, an update will be provided ahead of the second meeting of creditors," Deloitte said.
Deloitte had shortlisted Bain Capital and Cyrus Capital Partners as potential new owners of VA. However, Cyrus Capital Partners announced earlier today it had dropped out of the process.
The administrators also had received a proposal from a group of bondholders that would entail converting their debt to equity, re-listing the airline and adding fresh capital to the company.
Deloitte said it considered all bids before settling on Bain Capital as VA’s preferred buyer.
U. S.-based Bain Capital already had received approval from Australian Treasurer, Josh Frydenburg, to complete the transaction under the country's Foreign Investment Review laws, the administrator said.
The second meeting of creditors is due to be held at the end of August, with Deloitte to outline details of the estimated return to creditors and the steps needed to complete the sale of the airline group.
Separately, VA CEO, Paul Scurrah, said the airline would work closely with Bain Capital on its vision for the business.
Scurrah said the investment would "cement our future as a major Australian carrier, secure thousands of direct and indirect jobs and ensure we can continue to bring competition to millions of customers for many years to come".
“This is a great day for Virgin Australia and a huge milestone as we move forward with Bain Capital,” Scurrah said in a statement.
“Bain Capital has spent many hours over the past weeks speaking to us and developing a deep understanding of our business and working to secure a deal with our administrators.
"We know they are committed to investing in the airline and we are thrilled to be working with them into the future."
Bain Capital managing director in Australia, Mike Murphy, told the Australian Financial Review newspaper Scurrah and his leadership team had worked tirelessly during the administration period and were "critical to our future".
"Our investment and plan for the airline will support and celebrate Virgin Australia’s unique culture and protect as many jobs as possible for the short and medium-term in a way that will make significant jobs growth possible," Murphy said.
