Administrators working through the sale of Virgin Australia (VA) have told creditors they have a number of “high-quality” parties interested and are hoping to sell the airline by the end of June.
Administrators at Deloitte told 1300 creditors present via video link at a meeting in Sydney yesterday that they had received a number of bids several “high quality” parties interested in buying the airline.
Speaking after the meeting, lead administrator for Deloitte, Vaughan Strawbridge said: “Eight have signed non-disclosure agreements and negotiations are continuing with another 12.”
While official names were not mentioned, it’s believed parties interested in buying the airline include Australian private equity group Ben Gray, American specialist airline investor Indigo Partners and Canadian investment group Brookfield.
Andrew ‘Twiggy’ Forrest is also reportedly considering making a bid with the West Australian billionaire mining magnate believed to be putting together a consortium to take over VA.
Temasek – Singapore’s sovereign wealth fund which owns Singapore Airlines, one of the current majority owners of Virgin Australia is also believed to be on the list.
VA is 90 per cent foreign owned with Singapore Airlines, Etihad Airways and Chinese conglomerates HNA Group and Hanshan owning 80 per cent between them while Richard Branson’s Virgin Group still owns 10 per cent.
Indicative offers are now due in about a fortnight with “Binding offers will then be required in June,” said Mr Strawbridge.
“We remain confident that our target of achieving a sale by the end of June is achievable,” said Mr Strawbridge.
The airline went into voluntary administration on April 21 due to a mounting debt cloud, owing almost $7 billion to more than 12,000 creditors.
It’s believed that $1 billion is owed to customers in future flight bookings and credits owing since COVID-19 began.
About 9000 staff work directly for Virgin Australia with up to 15,000 jobs at risk should a decision be made to streamline the airline to service its debt.
“Our objective is to restructure and refinance the business so it emerges stronger on the other side of the COVID-19 crisis,” Mr Strawbridge said.
“It’s still early days, yet I’ve been encouraged by the level of sophisticated party interest in the sale of Virgin Australia.”
The next meeting will take place on August 22 and the hope is that by then, a new owner for Virgin Australia will be in place.
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