An 11th-hour bid to take control of Virgin aims to revitalise the airline with a supply of $1 billion in cash while also safeguarding staff entitlements and honouring frequent flier points and flight credits.

The proposal by Virgin Australia’s debtholders was lodged with the administrator, a spokesman for the bondholders said on Wednesday.

It comes two days after Bain Capital and Cyrus Capital Partners made final and binding offers for the airline.

“Our plan offers a sustainable capital structure underpinned by public ownership to provide certainty and support the strong operating plan for the airline,” the spokesman said in an emailed statement.

The debtholders – who are owed around $2 billion – will be able to swap their bonds into shares, and will also kick in around $1 billion to help keep the struggling airline viable, a source told Reuters.

Virgin Australia would remain a listed entity on the Australian stock exchange as part of the plan, which would allow bondholders to recoup around 70 cents on the dollar of their investment, the person said.

The 70 cent return is a future estimate based on expectations of share trading, a second source told Reuters.

The proposal would back the existing management team, honour full employee entitlements, customer travel credits and frequent flyer points, both sources said.

They were not authorised to speak on the record.

Australia’s second-largest airline entered voluntary administration in April owing nearly $7 billion to creditors, having struggled financially even before the coronavirus pandemic crushed travel demand.

Virgin Australia’s administrator, Deloitte, declined to comment. Deloitte had said on Monday after receiving the Bain and Cyrus offers that it hoped to select a preferred bidder by June 30.

Deloitte did not release financial details of those offers but said both planned to operate the airline as a smaller, single-branded domestic and short-haul international carrier with growth potential.

Virgin Australia competes against larger rival Qantas Airways Ltd in the domestic aviation market, which is an effective duopoly.