The administrators and advisors of Virgin Australia have whittled down the number of suitors after spending the weekend mulling over all the non-binding offers.
Deloitte’s Vaughan Strawbridge, who is leading the administration process, said in a statement released today that his team have now shortlisted a small number of “well-funded” parties with strong aviation credentials that are being invited to into the next stage.
“We are delighted by the strength of each of those on the shortlist, with parties selected being well-funded and possessing deep aviation experience,” he said.
“The parties have also worked constructively with the administration process and put forward credible indicative bids. Importantly, each has a plan for the business which can secure the future for thousands of Virgin Australia employees.
“These parties enable us to seek the best available commercial solution which we are all looking for, while meeting our responsibility to maximise the outcome for creditors and see the airline continue as one of the country’s two carriers serving Australians across cities and regions.”
Strawbridge said the administrators were “very pleased” so far with the progress of Virgin’s administration and sale process, noting “excellent engagement from highly-credentialed parties”.
“This has been very important to ensure not only the future employment of so many passionate members of the Virgin team, but the future of Australia’s second domestic airline, which is in the national interest of Australia,” he said.
Strawbridge also noted that the administrators received more interest than anticipated from parties who are eager to be a part of Virgin Australia’s future.
“We understand some parties will be disappointed that they have not been invited to continue their interest and we hope they will respect our decision which is predicated on the business continuing and achieving the best outcome for all people impacted,” he said.
“We thank all those who have been a part of our process to date.
“We cannot comment on who the shortlisted parties are due to confidentiality commitments, but we will be working intensely with them over the next four weeks to enable binding offers by mid-June.”
This will involve the sharing of more detailed financial and operational information, management workshops and meeting with as many of the financiers, landlords, suppliers, unions, and other stakeholders of the business as possible, according to Strawbridge.
“We are very excited about embarking on the next phase of the sale process and working with the shortlisted parties to see Virgin Australia restructured and come out of voluntary administration in a strong and sustainable position,” he said.
According to mainstream media reports, the four parties that have bid their way to the next round are Bain Capital, BGH Capital, Indigo Partners, and Cyrus Capital Partners.
Deloitte noted in an update on Friday that 19 parties had access to Virgin’s data room prior to the deadline for non-binding indicative offers, and eight of these were “sufficiently advanced” in their interest.
The next stage will see the shortlisted candidates submit binding offers by 12 June, with the administrators aiming to seal a deal by the end of June.
Velocity unfreezes point redemptions
Meanwhile, Virgin’s frequent flyer program has announced on Friday that members can now redeem their Velocity Points to fly on some of its most popular domestic routes for travel from 1 September 2020.
“We’re hopeful that domestic travel restrictions and state and territory border lockdowns ease by September, and for many of us, a local holiday and catching up with interstate family and friends will be well overdue,” a Velocity spokesperson told Travel Weekly.
“We look forward to sharing more offers with our members as we emerge from the COVID-19 crisis and travel resumes more broadly.”
For those passengers who book a Virgin Australia Reward Seat or Any Seat before 1 September 2020 for travel after this time, the airline will waive fees for any changes or cancellations made until 1 September.
If passengers or Virgin cancel a flight before 1 September 2020, travellers will be refunded points/cash in full to the original form of payment, minus any booking or credit card fees.
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