The man appointed by the government to be its representative in the battle to rescue Virgin has argued it’s “too early to tell” if the proposed sale to Bain has been a success.
Speaking at a COVID-19 Senate select committee, Nicholas Moore said, “It appears to be going down a path that gives, I think, stakeholders in the company quite a degree of comfort that there is an end point in sight, but we’re not there yet.”
The comments are the first Moore has publicly given since Bain beat out Cyrus Capital Partners last month to become the preferred bidder for the airline. However, in the last few weeks, the business’ bondholders have vowed to fight on and put a rival bid forward so they can recoup more of their $2 billion investment.
Former Macquarie chief Moore was appointed by the government just two days after Virgin entered administration, with a remit to be its eyes and ears in the sale process.
Earlier this week, Australian Aviation reported that Virgin Australia’s administrator won’t accept a rival bid from bondholders – despite a Federal Court judge insisting they can put their alternative proposal to a vote.
Deloitte made the declaration in a letter sent on Friday on creditors, which also confirmed that ‘winning’ bidder Bain has already pumped $125 million into the business to keep it trading.
The letter revealed for the first time an exact breakdown of how much the 10,247 creditors, including 9,020 employees, are owed. In total:
- Secured lenders and aircraft financiers are owed $2,284 million;
- Unsecured bondholders are owed $1,988 million;
- Trade creditors are owed $167 million;
- Aircraft lessors are owed $1,884 million;
- Landlords are owed $71 million;
- Employees are owed $451 million (in the event of liquidation); and
- Customers entitled to credits for flights that were cancelled due to the pandemic are potentially owed $604 million.
Those groups will find out exactly how much money they will receive from Bain’s proposal on 19 August 2020, before the second creditors meeting and vote to rubber-stamp the deal on 26 August.
Bain has already guaranteed employee entitlements, including potential redundancy payouts, will be covered in full as will customers’ travel credits and refunds.
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