The TWU and Virgin’s administrator have both rebuffed an apparent intervention by bondholders to enter the bidding war for the airline at the 11th hour.
The union’s national secretary, Michael Kaine, called the move “unsettling”, while a statement released by Deloitte hours after the final deadline passed pointedly made no mention of a third bid.
Meanwhile, in a new twist, The Australian Financial Review has reported that the state of Queensland has tied up a deal with both remaining bidders, Bain and Cyrus Capital Partners, to keep the business in Brisbane in exchange for $200 million in benefits.
The dramatic afternoon of revelations came after the ‘final’ third deadline for bids expired at 10am on Monday, ahead of a decision expected by 30 June.
Administrator Vaughan Strawbridge released a statement hours after the final deadline passed that made no mention of a much-rumoured intervention by Virgin Australia’s bondholders.
It came after a separate report in The Australian Financial Review suggested the group had been “secretly working for weeks” on a plan to launch their own bid, which is being headed by restructuring experts Faraday Associates and Corrs Chambers Westgarth.
Overall, there are 6,000 retail investors who have money tied in Virgin’s bonds, and $2.1 billion of the business’ $7.1 billion of debt is allocated to bondholders.
Instead, Strawbridge paid tribute to both bidders, whom he said had put in “an enormous amount of work to get here today, are well-funded and are enthusiastic supporters”.
Shortly after, the TWU broke cover to announce the bondholders involvement was “unsettling”, blaming the government for its refusal to get involved.
The TWU has previously not taken sides in the bidding process, so the comments will be viewed as hugely significant, particularly as union support will be vital in deciding who will win the contest.
The airline’s employees together account for 9,020 of the total number of creditors and are owed $451 million.
Finally, in a separate development, the AFR confidently reported that the Queensland government’s representatives have struck a deal with both Bain and Cyrus to keep the airline based in Brisbane.
The newspaper claimed the deals were signed late on Sunday, on behalf of the state’s fund manager QIC to be a “large investor” in either consortium.
The money has been set aside from its new Future Fund, and also involved investment bank Jefferies Australia.
Earlier today, Virgin Blue co-founder Rob Sherrard was linked with an 11th-hour bid to acquire the airline.
Selected reports said the stricken airline’s bondholders have drafted in a team of aviation experts, including Sherrard, to formulate an audacious bid that would involve swapping their $2 billion of debt for equity.
Sherrard famously wrote up the initial concept of Virgin Blue with Brett Godfrey on the back of a beer mat in a London pub. The pair was surprised that Australian airfares were so much higher than equivalent routes in Europe.
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