TWU backs Bain’s Virgin deal at 11th hour

written by Adam Thorn | September 4, 2020
VH-VPD Virgin Australia Boeing 777-300ER – 882020 Craig Murray

The TWU has finally urged its members to rubber stamp Bain’s deal to take control of Virgin Australia – but left its public announcement until hours before Friday’s vote.

National secretary Michael Kaine said he looked forward to working with the group but pointedly warned the investors to seek “co-operation not confrontation” with employees.

Australian Aviation understands the union’s relationship with Bain unravelled because of its refusal to dismiss speculation former Jetstar chief executive Jayne Hrdlicka could be the new chairman. Hrdlicka had a notoriously fraught relationship with unions in her role at the Qantas Group.

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However, the union’s new statement suggests relations have thawed and the pair will now be working together.

“We will vote to accept Bain Capital as the new owners of Virgin and we look forward to working with them to put Virgin back into the sky, stronger and better than before,” Kaine said. “But to do this Bain must listen to workers and utilise their skills, energy and experience in rebuilding the airline.”

While Bain beat out Cyrus Capital Partners in May to become the administrator’s preferred bidder, the decision won’t be rubber-stamped until a final creditors’ meeting on 4 September.

The deal creditors are voting on would see unsecured creditors, including bondholders, receive between just nine and 13 cents in the dollar on their investment, but all employee entitlements paid in full. If Bain fails to win the vote, the sale will happen anyway but as a more messy asset transfer.

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On Thursday, Virgin grandee Sir Richard Branson threw his backing behind the plan in a surprise intervention that hints the new airline would keep the Virgin branding.

“I have confidence in the revival plan for Virgin Australia, and Virgin will be working closely with Bain to rebuild the airline,” Sir Richard said. “As the founding shareholder, I am extremely proud of what Virgin Australia has achieved over its first 20 years.

“We look forward to helping to create the next important chapter, as Virgin Australia get back to flying and connecting Australia once again.”

Virgin Group chief executive Josh Bayliss followed by saying the business would vote for the plan because it’s the “best way forward” for the airline to return.

The Virgin Group is entitled to vote as a current shareholder in the company – though likely won’t see a return under the terms of the deal.

Deloitte’s Vaughan Strawbridge, who has overseen the administration process, has said the deal represents an “excellent outcome” for Virgin Australia.

“This will provide certainty for the business under new and committed owners. It provides certainty for employees and customers. It provides a return to creditors. And it can be completed sooner, and at less cost to creditors,” he said.

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