Virgin Australia's bond holders seek nod for sale alternative

A Virgin Australia aircraft on the tarmac at the domestic terminal of Sydney Airport. Virgin Australia, 20 per cent owned by Singapore Airlines, entered voluntary administration in April owing nearly A$7 billion (S$6.8 billion) to creditors, includin
A Virgin Australia aircraft on the tarmac at the domestic terminal of Sydney Airport. Virgin Australia, 20 per cent owned by Singapore Airlines, entered voluntary administration in April owing nearly A$7 billion (S$6.8 billion) to creditors, including bond holders, as the outbreak halted global travel.PHOTO: REUTERS

S'pore's Broad Peak, HK's Tor seek interim orders to access info on Bain transaction

SYDNEY • Virgin Australia Holdings bond holders have applied to the Takeovers Panel for approval to allow them to make an alternative proposal to creditors for the sale of the airline to private equity group Bain Capital, the panel said yesterday.

Singapore's Broad Peak Investment Advisers and Hong Kong's Tor Investment Management are also seeking interim orders allowing them to access information including the terms of the Bain transaction, the panel statement said.

Bain last month agreed with Virgin's administrator Deloitte to buy Australia's second biggest airline for an undisclosed sum, banking on an aviation industry recovery.

Deloitte selected Bain over a bid from private equity group Cyrus Capital Partners and a debt-to-equity swap proposed by the group of unsecured bond holders owed A$2 billion (S$1.93 billion).

Virgin Australia, 20 per cent owned by Singapore Airlines, entered voluntary administration in April owing nearly A$7 billion to creditors, including the bond holders, as the outbreak halted global travel. Deloitte's decision ends an auction process that initially drew interest from more than 20 parties.

The Bain deal will be subject to a vote by creditors at a meeting next month.

The bond holders have said certain circumstances regarding the administrator's sales process are unacceptable and have the effect of precluding them from presenting an alternative proposal at the meeting, the panel's statement said.

In an affidavit filed last week, Virgin administrator Vaughan Strawbridge of Deloitte said the airline would not have enough funds to continue to trade until the August meeting in the absence of interim funding provided by Bain.

Bain declined to comment while Deloitte did not respond immediately to a request for comment.

Besides Virgin, Flybe Group in Britain and Latam Airlines Group in Chile are other troubled airlines that have gone into administration or had collapsed in recent months. Grupo Aeromexico SAB, Mexico's second largest airline, also on July 1 filed for bankruptcy in the United States.

REUTERS

 
 
A version of this article appeared in the print edition of The Straits Times on July 07, 2020, with the headline 'Virgin Australia's bond holders seek nod for sale alternative'. Print Edition | Subscribe