Virgin Australia’s creditors have voted to approve the airline’s sale to Bain Capital, clearing the way for the carrier to emerge from voluntary administration.
Administrators for Virgin Australia are recommending creditors vote to accept a proposed takeover of the company valued at A$3.5 billion ($2.5 billion).
Private equity investor Bain Capital has a seemingly clear run to complete its acquisition of Virgin Australia after the withdrawal of a rival takeover proposal.
Following the confirmation that Tigerair Australia will cease operations, Routes looks at the Virgin Australia low-cost subsidiary’s place in the market prior to the COVID-19 pandemic.
The selection of Bain Capital as the successful bidder for Virgin Australia means the airline will survive in a smaller form and will broadly follow the strategic blueprint developed by the current management team.
The contest to select a new owner for Virgin Australia has entered the final stages, with the two remaining bidders presenting proposals that call for retaining the core parts of the airline’s operations.
The field of suitors for Virgin Australia has narrowed to two, with Bain Capital and Cyrus Capital Partners shortlisted by the administrator as the preferred bidders.
The bankruptcy administrator overseeing the Virgin Australia sale is preparing to narrow the bidders to a final shortlist of two candidates, with the winner set to be selected by the end of June.
There are now at least 19 entities expressing interest in buying Virgin Australia during the airline’s administration proceedings, according to court documents.
At least 20 entities are interested in bidding for Virgin Australia and the administrator for the airline expects the sale process to be completed by the end of June.
Western Australia’s Perth Airport (PER) has seized some of Virgin Australia’s parked aircraft to ensure that the airline can pay money owed to the airport.
Etihad Airways, which owns 21% of Virgin Australia, has said it was unable to provide further funding to prevent the airline’s entry into administration but remains open to discussions on a possible relaunch.
Australia’s second-largest carrier plans to continue operating a vastly reduced schedule while administrators from Deloitte work to find a buyer for the airline.
Virgin Australia has entered voluntary administration and the airline’s management is proposing to keep as much of the airline intact as possible when it reemerges under a new ownership structure.
Virgin Group chairman Richard Branson is saying Virgin Atlantic and Virgin Australia will need government support if they are to survive the COVID-19 crisis and keep competition alive in markets that would otherwise become effective monopolies.
Virgin Australia appears likely to enter voluntary administration this week amid the COVID-19 crisis as its options for acquiring the additional funding it needs have almost disappeared.
