Finance Finance News Four bidders shortlisted for Virgin Australia

Four bidders shortlisted for Virgin Australia

virgin australia bidders
A last-gasp bid has been made for Virgin Australia. Photo: TND
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Virgin Australia and its administrator Deloitte have shortlisted “highly credentialled” parties who could end up being the new owners of Australia’s second major carrier.

ABC News can confirm the shortlist contains four bidders: Private investment firm Bain Capital, private equity firm BGH Capital, US aviation investor Indigo Partners and global investor Cyrus Capital Partners.

Cyrus Capital, which was previously invested alongside Richard Branson in Virgin America, was a surprise bidder.

Virgin Australia’s appointed administrator, Deloitte, led by Vaughan Strawbridge, has for several weeks been working with the company’s management team on finding a new owner.

Administrators Mr Strawbridge, John Greig, Sal Algeri and Richard Hughes said in a statement they had shortlisted a “small number of well-funded parties with strong aviation credentials that are being invited into the next stage of the process”.

Deloitte did not comment on who the shortlisted parties were, due to confidentiality reasons, but said it would work “intensely” with the bidders over the next four weeks.

Final bids are due on June 12.

“We received more interest than anticipated from parties who are eager to be a part of the future of Virgin Australia,” Mr Strawbridge said.

“We are delighted by the strength of each of those on the shortlist, with parties selected being well-funded and possessing deep aviation experience.”

Virgin Australia went into administration in April, after being hit hard by coronavirus travel restrictions.

Pledge to keep most of Virgin’s staff employed

Virgin Australia went into administration on April 21, owing about $7 billion.

There had been about 20 interested parties, including a last-ditch bid by the Queensland government, but that list was culled at the end of last week.

At least eight “non-binding, indicative” offers were lodged with the administrators on Friday, and negotiations over the shortlist of four took place over the weekend.

Other parties that had considered initial non-binding offers before the shortlist included Canadian investor Brookfield, Indian aviation tycoon Rahul Bhatia, through his company InterGlobe Enterprises, and Australian mining magnate Andrew Forrest.

Brookfield reportedly pulled out because it did not want to be part of a group of more than two bidders within a short timeframe.

“We understand some parties will be disappointed that they have not been invited to continue their interest,” Mr Strawbridge said.

“We hope they will respect our decision, which is predicated on the business continuing and achieving the best outcome for all people impacted.”

Mr Strawbridge said all parties had “worked constructively” with the administrator and put forward “credible indicative bids”.

“Importantly, each has a plan for the business which can secure the future for thousands of Virgin Australia employees,” he added.

Travel bans implemented to control the spread of coronavirus forced the airline to ground most of its planes and temporarily stand down the majority of its 10,000-strong workforce.

The administrator said it wanted to get the best “commercial solution” possible, while maximising the outcome for creditors as quickly as possible.

This would ensure the airline could “remain a competitive force in the market and begin more normal operations as soon as COVID-19 restrictions allow”, Mr Strawbridge said.

He said the parties would now need to share more detailed financial and operational information, and undergo management workshops and meeting with financiers, landlords, suppliers, unions and other stakeholders.

-ABC