Virgin shareholder meeting: 20 buyers now keen

written by Adam Thorn | April 30, 2020
Virgin Australia will continue a seasonal Newcastle-Auckland service with Boeing 737-800s. (Rob Finlayson)
A Virgin Australia Boeing 737-800. (Rob Finlayson)

Virgin Australia’s administrator has told the first meeting of shareholders that there are now 20 parties interested in buying the airline – up from 10 confirmed last week.

Deloitte expects to have all offers on the table in just two weeks’ time and is “confident” a sale can be achieved by the end of June.

It comes as The Australian Financial Review has revealed that mining magnate Andrew “Twiggy” Forrest has emerged as a potential buyer.

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Vaughan Strawbridge, who is overseeing the process, said, “I’ve been encouraged by the level of sophisticated party interest in the sale of Virgin Australia.”

On Thursday, a virtual meeting open to 1,300 creditors herd bullish predictions for the future of Virgin Australia.

Already, eight bidders have signed non-disclosure agreements and have access to Virgin’s figures, and a further 12 parties are negotiating.

The Sydney Morning Herald claims the current management will hand interested buyers access to a relaunch masterplan on Tuesday.

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It comes as the AFR named Forrest, who controls Australia’s third-largest miner Fortescue Metals, as a potential suitor.

Other names in the running include BGH Capital, Indigo Partners, Wesfarmers, American distressed debt specialists Oaktree, and Canadian asset manager Brookfield.

Strawbridge said in a statement released on the ASX on Thursday, “We are now moving quickly to finalise a business plan to help guide interested parties and, in terms of next steps, mid-May is the time frame for the receipt of indicative offers. Binding offers will then be required in June. We remain confident that our target of achieving a sale by the end of June is achievable.

“We remain strongly focused on restructuring the business, creating a viable business operation that will appeal to prospective new owners, and bringing Virgin out of external administration as soon as possible in an outcome that will retain jobs and the airline’s contribution to Australia and its economy.”

On Monday, Australian Aviation reported that Perth Airport impounded four Virgin aircraft with heavy machinery as it seeks to recover $160 million in outstanding debt.

The next day it was revealed Velocity Rewards, which ultimately oversees the frequent flyer business, was also seeking $150 million. The airline group confirmed its collapse last week.

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13 Comments

  • Meepa

    says:

    20 Buyers with more Dollars than sense!

    Desperate hedge funds and Pension funds chasing yeild on the share price pop if they can do the same as JB and cook the books, even for a short time!

  • Deloitte are marketing Virgin like they were used car or double glazing salesmen. This is the biggest collapase since HIH in 2002. Bet the VA Board are proud of themselves and their 90% chinese/arab shareholders.
    If Tiggy Forrest moves forward it will be in conjunction with his Chinese Communist Party friends and buddy “tricky” Dickie Branson. Who knows he may front for the Chinese as a nominee!
    Best way to make a small fortune in aviation is to start with a big fortune and just wait a short time.

    • Scott Johnson

      says:

      Neil – I don’t know you, but what I do know is that you were badly hurt by Virgin and never quite moved on. Trawling the internet day in, day out looking to take down Virgin one clever comment at a time. Maybe your commentary is the reason Scomo refused help to the struggling airline? As but a link in the chain of lowly Australian worker bees who toil away to pay the bills I’ll truly never know what happens in the halls of power.

      Now I don’t know know what an aviation expert is, but in a country with fewer airlines than you can count on one hand I’d expect a bit more objectivity. You might detest Virgin, but it is rebuilding so now’s the time to iron out the issues that have plagued it.

      Help me help you. From today forwards, whichever shape Virgin will take, tell me why it will fail?

      I truly hope the 20 parties interested in the purchase read your reply.

      Cheers

      PS- double glazing is great at keeping the house warm in winter.

      • Benedict

        says:

        ScoMo refused a ‘bailout’ to them, because they’re 90% FOREIGN owned!

        Aussie taxpayers’ money will not be used to assist them.

    • Nicolas

      says:

      Well said, as always, Neil.
      At least you know what you’re talking about in your position.
      The average ‘Joe & Joan Public’, haven’t the slightest clue how an airline is run. All they want is ‘cheap’ fares, & they haven’t the IQ to know ‘somethings gotta give’ (ie poor maintenance control etc) to get their want.

  • J.W. Willoughby

    says:

    Hopefully Virgin can be saved, but I would rather see it go to the wall than become wholly owned by the Chinese.

  • Craigy

    says:

    I think Forrest is probably a front for possible Chinese buyers. If so, I hope the Treasurer says no. The relationship between Forrest and the Government at the moment is on ice so there won’t be any favours. It would be interesting to see what the new business plan is once finalised.

    • Jenny

      says:

      Your right Australians would shudder at the very thought of being owned and pushed around by the Chinese who have to answer to the Uigher people they have detained for their cultural and religious beliefs grabbing their land to run a railway through the province unlawfully called Silk Road route to Europe etc

  • Bernard

    says:

    I would hope Wesfarmers get it or at least controls it if not full ownership as I think they would balance the ownership between good for country and good for company better than some of the a-holes who have had a say in its running.

  • Linda Weaving

    says:

    Who would want to by an airline that hasn’t made profits in years, owes $billions, at a time when the air travel market has collapsed & realistically won’t recover for many years? Not to mention the huge push for reduced air travel & use of green transport alternatives to address aviation’s contribution to climate change! They’re asking to lose money!

  • Andrea Shearer

    says:

    Well, what’s worse that incarceration at home? Listening to negative comments by “armchair critics “.
    If you are all so paranoid about China and them being shareholders in Virgin Australia, Google what China owns in Australia and has done for since the 90’s . Also follow who were the CEO’S of Virgin prior to Paul Scurrah. He has only been there since Feb 2019, that’s where you should be directing your concern. Scott J’s reply is on the money. I don’t think multiple airlines investing in other airlines is a smart business practice. So fingers crossed Virgin gets a good reliable mix of shareholders.

  • Anton

    says:

    If Virgin Australia wants to get out of administration. they will have to get rid of their leased aircraft

  • G Farrance

    says:

    More importantly, whilst in administration, they can get rid of leased aircraft, with no penalty. Further, drop their order for the MAX, not only will it reduce financial burden, but it will give them time to look at the market for aircraft that may be more suitable, both for short trips and long haul when the world starts traveling again.

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