Bain Capital, one of the two remaining official bidders for Virgin Australia, has reacted to news the airline’s bondholders have launched an 11th-hour bid by making a series of new public promises to staff.
Mike Murphy, a managing director of Bain Capital, said in a statement the group would protect as many jobs at Virgin Australia “as possible” and create a “broad-based employee equity participation program”.
The move is significant because, earlier, the Australian Council of Trade Unions president Michele O’Neil called on Bain to make these very assurances public.
The support of staff is vital to the deal as employees together account for 9,020 of the total number of creditors and are owed $451 million.
The statement, released at 12:03pm on Wednesday from Mike Murphy, said Bain would:
1. Cover all employee entitlements;
2. Protect as many jobs at Virgin Australia as possible;
3. Implement a support program for employees impacted by COVID; and
4. Develop a broad based employee equity participation program.
The TWU, the biggest union, has yet to take sides in the competition between Bain and Cyrus, but has called the bondholders move “unsettling”.
Bain’s statement to Australian Aviation and other media outlets came hours after Virgin’s bondholder broke cover with their 11th-hour bid, and is a sign of the rapidly shifting powerbase in the battle to secure control of the airline.
Sydney advisory Faraday Associates lodged the proposal with administrator Deloitte at 7am on Wednesday, which will involve offering $800 million to recapitalise the business and $125 million to keep it alive during the administration process.
Faraday Associates, which is representing bondholders, said in a statement, “Our plan offers a sustainable capital structure underpinned by public ownership to provide certainty and support the strong operating plan for the airline.
“This approach offers the fastest pathway to return Virgin to the new operating environment for Australian aviation and positions the airline to resume high-quality services to its millions of loyal Australian customers.”
The move was sparked by fears that, should Bain or Cyrus win, unsecured bondholders would be wiped out.
Deloitte is due to pick the winning bidder next week and put that proposal to creditors later in August.