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Anonymous ID: 4e703d June 25, 2020, 8:21 p.m. No.9749871   🗄️.is 🔗kun   >>9934 >>9991 >>0043 >>0375 >>0471

Bain Capital agrees to buy struggling Virgin Australia

 

U.S. private equity group Bain Capital said on Friday it has agreed with the administrator of Virgin Australia Holdings Ltd to buy Australia's second-biggest airline for an undisclosed sum.

 

Bain's bid was chosen over a rival offer from Cyrus Capital Partners and a recaptalisation proposal put forward by Virgin Australia bondholders, administrator Deloitte said. Deloitte said it was not yet possible to estimate the return to creditors and did not expect any return to shareholders. An update on the return will be provided ahead of a creditor's meeting in August, it said.

 

The deal will need to be approved by 50% of creditors by value and 50% by number to be finalised. Bain is using private equity as well as its distressed and special situation funds for the deal, according to Deloitte, which said the deal provided a "significant" injection of capital into the airline to help recapitalise and position it for the future. "Under our ownership we will strengthen Virgin's regional services and ensure the airline emerges offering exceptional experiences at great value while continuing to service business travellers, as well as those of us travelling for fun or to visit loved ones," Mike Murphy, an Australia-based managing director at Bain, said in a statement. Virgin Australia entered administration in April owing nearly A$7 billion ($4.82 billion) to creditors but is viewed as an attractive investment given the Australian domestic aviation market duopoly it shares with larger rival Qantas Airways Ltd .

 

Cyrus on Friday morning said it had pulled out of the bidding, citing unwillingness on the part of Deloitte to engage in meaningful talks about its offer. The Bain proposal supports Virgin Australia's current management team led by Chief Executive Paul Scurrah and its improvement plan for the airline, and has committed to the retention of thousands of jobs, Deloitte said in a statement, thanking Cyrus for participating in the bidding process. "We believe Bain Capital's proposal offers the best possible future for Virgin Australia, its employees and its customers," Scurrah said in a statement.

 

Virgin Australia has around 9,000 employees. Qantas on Thursday said it would cut more than 20% of its 29,000-strong workforce due to a bleak international travel outlook due to border closures associated with the coronavirus outbreak. Virgin Australia has a smaller international business than Qantas and is more exposed to the domestic market, where some state travel restrictions are being lifted and airlines are adding capacity.

https://asia.nikkei.com/Business/Business-deals/Bain-Capital-agrees-to-buy-struggling-Virgin-Australia