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Virgin Australia’s administrator will borrow $200 million to keep the airline flying as it sifts through potential suitors in preparation for a sale.
The Australian claims the business is not as liquid as earlier cited by management, and had just $30 million when the operation was handed over to Deloitte’s Vaughan Strawbridge two weeks ago.
Meanwhile, it’s also emerged that Dubbo mayor Ben Shields has made an audacious bid to convince a reborn Virgin Australia to base its regional operation at the central-west NSW airport.
Shields reportedly penned a letter to state Premier Gladys Berejiklian, persuading her to provide a financial package to the airline.
“If Dubbo was able to further increase the services it offers, it would have the potential to create hundreds of jobs for our region,” he wrote. “It would be a welcome boost at a time when the COVID-19 pandemic and ongoing drought has ravaged our local economy.”
The airport recently upgraded its runway, lighting, car parks and expanded its general aviation precinct. It currently hosts QantasLink, Fly Pelican, Fly Corporate, Rex and AirLink.
“Dubbo Regional Council had been in regular contact with Virgin with the intent of forming a partnership for regular passenger transport services from western NSW to a number of potential ports in and outside of NSW,” Shields said.
“There is no doubt the aviation industry is currently experiencing a difficult time but I am confident there is a bright future ahead and Dubbo can be an important part of that recovery for our domestic airlines.”
The news comes after it emerged that Virgin Australia is still in talks with federal and state governments, leading to hopes a partial bailout could well happen.
Virgin Australia’s administrator told the first meeting of shareholders that there are now 20 parties interested in buying the airline and expects to have all offers on the table by mid-May.
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Rod Pickin
says:This reported possible $200m loan to VOZ does not compute, if it’s 4 major owners can’t/won’t respond to the call for funds then since the company is in “Administration” I can’t see a normal commercial loan approval so it has a be a governmental offer which will make them feel all warm and fuzzy but just not sensible. We are advised that a potential buyer could be identified in mid May , not far away now so why not wait? – short term pain etc
Paul
says:I’m tired of reading that Richard Branson “pays Tribute to Virgin staff”. If he had lived up to his responsibility as a shareholder he would have paid CASH to the Virgin staff instead to help save their jobs!
William
says:Paul, you’re 100% correct!
SQ has ‘washed its’ hands’ of it, preferring to keep an Indian LCC flying.
Pardon the pun, but all this ‘resurrection’ talk is pie in the sky.
It’s more in debt than $7bn, as evidenced by the want of $200m.
Interesting times ahead.
Marum
says:I like the way Sir Rick is; “paying tribute to the staff.”.
Sounds as if they are already dead, and laid out in state.
Regards….Marum.
Bernard
says:Shareholders with real power to make decisions need to face up. As small shareholder they don’t get my sympathy for dragging the airline down the path it did. Their strategy seemed to be: dump excess equipment on Virgin Australia via leases/other methods for which they or friendly parties benefitted in some way; be a tax dodge; appear Australian by having mum and dad investors and use the ‘Australian’ perception to gain financial/emotional benefit in some way and of course force competitors Qantas, Rex, others to use their financial resources to counter them leading to reduce competitor profit/increase expenses. I think Sadly govt didn’t ask for ownership also due to contingent or other possible liabilities, for example debt being closer to $A7 billion than lesser numbers reported. On other hand Virgin tried to be a competitor and failed simple as that, as Qantas did put some people for off one reason or another and they wanted an alternative. Qantas had deeper pockets and was defending. Can’t change perception that Virgin was the attacker due to its large foreign ownership.