Virgin Australia’s bondholders have gone to the Federal Court in a fresh attempt to access details of Bain’s winning bid for the airline so they can counter with a rival offer.
The move comes days after the pair also asked Australia’s takeover watchdog to intervene because “certain circumstances” of the administration process were “unacceptable” and stopped them presenting their vision for the reborn airline to creditors.
It is thought $2.1 billion of the business’ $7.1 billion of debt is allocated to bondholders, who have been told they are unlikely to be repaid that amount in full. Bain beat off Cyrus Capital Partners last month to become the preferred bidder for the airline, with a final vote going to creditors in August to rubber-stamp the deal.
However on Wednesday, bondholders, represented by Broad Peak Investment Advisers and Tor Investment Management, launched a so-called ‘interlocutory process’ to force the release of now confidential documents.
The application, seen by Australian Aviation, also asks for the papers to be sent to Australia’s Takeovers Panel, too.
Bondholders earlier went to the Takeovers Panel on Monday to make a similar request, which administrator Deloitte brushed aside as being “without merit”.
The two interventions have come about because Virgin’s administrator played down the chances of creditors receiving their money back last week.
Shareholders, it said, were unlikely to receive a cent while creditors more broadly are unlikely to be repaid in full, a statement that affected bondholders, staff owed entitlements and aircraft lessors.
The moves are the latest in a long saga that began when Virgin Australia’s bondholders broke cover and launched an attempt to wrestle control of the airline days before Bain won.
The bid was linked with Virgin Blue co-founder Rob Sherrard, who famously wrote up the initial concept of the low-cost carrier with Brett Godfrey on the back of a beer mat in a London pub.