iscover
British business magnate and Virgin Group founder Sir Richard Branson has declined to comment on which of two remaining bidders his company prefers, according to a reports.
“As the founder shareholder and licensor of the Virgin brand, Virgin Group will continue to engage with the administrator, bidders and management team in bringing Virgin Australia out of administration in a sustainable way for the benefit of customers, employees and communities in Australia,” a spokeswoman told The Australian.
“We have been greatly heartened by the amazing public support for Virgin Australia and we are pleased that the process being run by the administrator has attracted such a high quality group of bidders committed to the revival of the airline.”
On Tuesday afternoon, Deloitte administrators announced that the shortlist had been whittled down to Bain Capital and Cyrus Capital Partners.
While Sir Richard has remained tight-lipped about the sale, both bidders have ties to his flagship Virgin Group. Bain Capital and Virgin Group invested jointly in the cruise industry with Virgin Voyages, while New York-based Cyrus has teamed up with Sir Richard over Virgin America and the ill-fated Flybe.
While Bain has committed to sticking with the current Virgin branding, it is unclear whether either company will be willing to stump up the 1 per cent annual turnover fee typically associated with the name.
However, recent weeks have seen both companies publicly advocate their case, with Bain declaring itself on 25 May to have the “strongest capital base of any of the bidders”.
Final binding offers and a decision on the sale of the airline are expected towards the end of the month.
Bernard
says:The first cost to be cut should be the Virgin name fee which this article states as 1% of turnover.
Neil Hansford
says:I wouldn’t be so sure that the Branson Virgin name levy is only 1%. It is paid on all Virgin branded products.
I have seen it as high as 10% in Europe and as low as 4%.
The airline industry profitability can’t stand up to 4% off gross revenue! Maybe Branson would like to declare how much he has taken out of Virgin Australia since its launch. There are suggestions it could be in excess of $150 million and these are shown in the accounts until recent years where VA admit to $15m per annum when they were loosing a billion dollars. They say it is good value-REALLY
Edward
says:Yes Neil, I agree, it’s certainly more than 1% annually.
RB gets this ‘money for jam’ so his ‘lifestyle’ is altered in any way!
Shame he doesn’t think about his staff instead.
Lucas
says:I agree with the comments above, that is the reason why he is hanging around like a bad smell. The Virgin brand will remain I think, although it offers nothing. Branson’s brand has passed it’s use by date.