Virgin Australia Holdings Ltd’s administrators Deloitte have today announced details of what U.S. private equity group Bain Capital’s intends to offer the group’s 10,000-plus creditors (including staff) as part of its proposed purchase of the airline.
The good news for ‘priority creditors’ and employees is that new owners Bain Capital have said they will receive 100% of their owed entitlements in a report published today by Deloitte when the deal finally goes through.
For the 10,000-plus unsecured creditors including Bondholders owed around A$2 billion, however, the news may not be quite so palatable with Bain Capital announcing they will pay back 9-13% of funds owed.
A previous statement by Deloitte to the ASX on June 30 had warned that there “would not be sufficient recoveries to pay creditors in full” with Bondholders fearing they could get as little as 10c in the dollar.
What about customer flight credits?
As per the previous Bain Capital new ownership announcement made on August 5th, customers and travel agents will be notified directly of any associated flight cancellations.
At the time, the announcement also stated that any Tigerair Australia customers and those affected by any cancellations would be provided with a travel credit for use on Virgin Australia operated services.
This was again confirmed in the released statement today, with Deloitte saying: ‘Under the sale of the Virgin Group to Bain, at the completion of the sale, Virgin Group will provide you with a new credit for an amount equal to any remaining value on your Conditional Credit (Future Flight credit).’
The group also said that ‘to preserve value for customers with credits for bookings made prior to administration, booking dates will also be extended to 31 July 2022 for travel until 30 June 2023.‘
A new plan for a new future
Virgin Australia also announced their masterplan on August 5th for what Bain Capital says will ‘create a stronger, more profitable and competitive business, building on its unique culture and securing approximately 6,000 jobs as it prepares to exit voluntary administration.’
The lengthy masterplan included retiring Tigerair, pausing long-haul international flights, moving to an all-Boeing 737 fleet for domestic and short-haul operations and maintaining Velocity points and credits.
READ: Virgin Australia Masterplan: 3000 Jobs, Tigerair To Go, Refunds Honoured
A new Brisbane HQ with Flight Centre
After reporting that Virgin Australia ‘may’ have been in talks with Flight Centre Travel Group about taking up some of the travel company’s Brisbane HQ following the freeing up of space due to COVID-19-related job cuts, it turns out the rumours were true after all.
Virgin Australia announced that they will be taking 5-floors at Southpoint to form a new head office base in September.
READ: Virgin Australia To Move In With Flight Centre In Shared Headquarter Hub
The second meeting of Virgin Australia Holdings Ltd’s creditors will be a virtual, online meeting and is scheduled for 10:00 am AEST on Friday 4 September 2020.
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