The battle to gain control of Virgin Australia is back on after bondholders confirmed they will put their alternative proposal to creditors in August.
The revelation came despite the group losing a Federal Court case on Friday morning to obtain access to secret details of Bain’s ‘winning’ bid approved by administrator Deloitte.
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.
Days later it emerged that creditors, including bondholders owed $2.1 billion, were unlikely to be repaid in full while shareholders wouldn’t receive a cent from the deal.
On Friday morning the bondholders, represented by Broad Peak Investment Advisers and Tor Investment Management, went to the Federal Court to try and gain access to confidential documents regarding the Bain ‘deal’ so they could launch a counter offer – but judge John Middleton knocked back the request.
However, despite the ruling, the judge urged Deloitte to consider sharing more information voluntarily.
“The administrators may have to make some rather hard decisions about how much they do disclose information for the purposes of the second creditors’ meeting,” Justice Middleton said.
“If they take a particular approach the second creditors’ meeting may become litigious.
“I’m just … warning is putting too fine a point on it I may say.”
He added it was also in “everyone’s interest” for there to be communication between the administrator and creditors.
The bondholders’ counsel, Ian Jackman, then indicated the group would still table a rival offer in August, saying, “My clients seek to bring an alternative DOCA [deed of company arrangement] at the creditors’ meeting. We have a right to do that.”
Today’s court action was the latest move 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.