Virgin Australia’s administrator announced late on Tuesday afternoon that he’s whittled down the four prospective bidders to two: Bain Capital and Cyrus Capital Partners.
Deloitte’s Vaughan Strawbridge said both parties “are well-funded, have deep aviation experience, and see real value in the business and its future”.
The decision means that private equity firm BGH Capital and US aviation company Indigo Partners have been knocked out, ahead of a 30 June deadline for a binding agreement to be reached.
Cyrus Capital is the bidder most closely linked to Sir Richard Branson, and Australian Aviation has previously reported speculation that it plans to maintain the business as a full-service international airline.
Cyrus is based in the US but has a presence in Europe. It led a consortium that owned the ill-fated Flybe, Europe’s biggest regional carrier that became the first major casualty of the coronavirus crisis.
Meanwhile, Bain Capital dramatically broke cover on 25 May to publicly declare it had the “strongest capital base of any of the bidders” and would be a “committed partner for Virgin Australia with a proven track record”.
Strawbridge said in a media statement, “Over the weekend through to today, we assessed the proposals received from shortlisted bidders and discussed their proposals with them to ensure a thorough and comprehensive assessment has been undertaken.
“Five non-binding indicative proposals were received on Friday, and they have now been further short-listed to two preferred bidders.
“We will now spend the coming weeks facilitating in-depth bidder engagement with the stakeholders of the business and work closely with both preferred bidders in the lead up to binding final offers being received.
“The strong interest coming from all parties has generated the competitive tension we have sought that is important in a process such as this, and we are in a strong place when it comes to delivering the best possible commercial outcome for all creditors, and to see a strong and sustainable Virgin Australia emerge from this process. It is still the intention to have a binding agreement in place by 30 June, which remains unchanged.
“There will also be speculation that entities associated with the parties that have not moved into this next phase, as well as others, could become involved in some capacity with the remaining parties. That will, of course, be a matter for them.
Australian Aviation previously reported that the TWU met with the government’s Virgin representative, Nicholas Moore, and told him this week that attempts to sell the business are being impeded by lack of clarity over whether or not there will be federal help.
Unions representing the airline’s employees – who together account for 9,020 of the total number of creditors and are owed $451 million – told the media later that a lack of reassurance means serious bidders are “trying to crunch numbers in the dark”.