Virgin Australia has gone into an immediate trading halt this morning ahead of an expected announcement on restructuring the struggling airline’s $5 billion of debt.
The Federal Government has been under pressure to help the airline since Virgin Australia chief executive Paul Scurrah asked to help it stay afloat with a $1.4 billion loan.
In a brief statement to the ASX this morning the airline said:
“Virgin Australia requests a trading halt as it continues to consider the issues brought about by the COVID-19 crisis including discussions with respect to financial assistance and restructuring alternatives which are ongoing.
“This has arisen due to the unprecedented COVID-19 crisis which has particularly impacted the aviation sector.”
Virgin Australia is also believed to have engaged with Houlihan Lokey, a leading global investment bank with expertise in mergers and acquisitions, capital markets, financial restructuring, and valuation.
At the close of trading on Thursday 9 April, Virgin Australia Holding (VAH) share price was 0.09 cents per share.
On the same day, Virgin grounded all domestic flights, except a single daily Sydney-Melbourne service through June 15.
A spokesperson for Virgin Australia last Thursday said the airline would continue to monitor passenger numbers and adjust their capacity requirements as necessary.
“As a result of government restrictions, less people are travelling and we have made changes to our schedules to reflect this.”
To date, the coronavirus crisis has grounded all of Virgin’s commercial aircraft and stood down thousands of workers due to the coronavirus pandemic. Virgin is, however, still continuing to fly cargo and charter flights, including assisting the government in bringing Australians home.
The airline had also recently launched an anti-monopoly aimed “Let’s Keep The Air Fair” campaign in a bid to drum up support for its government support package.
Virgin’s shares are tightly controlled by a group of foreign airlines including Singapore Airlines, Etihad Airways and Chinese conglomerate HNA Group that have also seen a sharp deterioration in revenues due to the coronavirus crisis.
The airline said a further announcement is expected within the next two trading days.
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