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Virgin bondholders go to court to access secret documents

written by Adam Thorn | July 8, 2020
Boeing 737-8FE VH-VOT
A Virgin Australia Boeing 737-8FE, VH-VOT, flying in better times.

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.

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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.

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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.

Steer your own in-flight experience – available on print and digital Whether our classic glossy magazine in your letterbox, daily news updates in your inbox, peeling back a few layers in the podcast or our monthly current affair reports, you can count on us to keep you up to date. Sign up today for just $99.95 for more exclusive offers here. Subscribe now at australianaviation.com.au.

Virgin bondholders go to court to access secret documents Comment

  • Paul

    says:

    So why didn’t the bond holders file during the process a bid for the airline. The opportunity was available to them and others to bid for the airline. Now they want to be disruptive and delay the entire process.

Leave a Comment to Paul Cancel

Your email address will not be published. Required fields are marked *

Virgin bondholders go to court to access secret documents

written by Adam Thorn | July 8, 2020
Boeing 737-8FE VH-VOT
A Virgin Australia Boeing 737-8FE, VH-VOT, flying in better times.

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.

Advertisement
Advertisement

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.

PROMOTED CONTENT

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.

Steer your own in-flight experience – available on print and digital Whether our classic glossy magazine in your letterbox, daily news updates in your inbox, peeling back a few layers in the podcast or our monthly current affair reports, you can count on us to keep you up to date. Sign up today for just $99.95 for more exclusive offers here. Subscribe now at australianaviation.com.au.

Virgin bondholders go to court to access secret documents Comment

  • Paul

    says:

    So why didn’t the bond holders file during the process a bid for the airline. The opportunity was available to them and others to bid for the airline. Now they want to be disruptive and delay the entire process.

Leave a Comment to Paul Cancel

Your email address will not be published. Required fields are marked *

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