Aviation

Bondholders dealt big blow in their bid for Virgin Australia

Huntley Mitchell

Huntley Mitchell

The hopes of Virgin Australia’s bondholders in blocking the airline’s sale to Bain Capital have been all but dashed following a Federal Court hearing.

The bondholders, made up of hedge funds Broad Peak Investment and Tor Investment Management, have been trying to have their alternative proposal for the airline counted as an alternative to Bain Capital’s offer that was chosen by Virgin’s administrators in June.

Broad Peak and Tor want to inject $800 million of new capital into the struggling carrier as part of their plan.

The bondholders would also provide $125 million worth of interim funding, and have their $2 billion in debt converted into equity in a reborn Virgin Australia, under their proposal.

It was the goal of the bondholders to have their proposed deed of company arrangement (DOCA) voted on against Bain’s at the second meeting of Virgin’s creditors on 4 September.

However, Justice John Middleton rejected the application made by Broad Peak and Tor at yesterday’s hearing.

“There will be no orders made in relation to ballots and proxy voting,” he said.

Justice Middleton also rejected the bondholders’ request to have a “facilitator” (aka an independent party) sit in on the second creditors’ meeting to help manage talks with the various stakeholders.

Bain Capital welcomed Justice Middleton’s decision to dismiss in its entirety the application made by the bondholders.

“Bain Capital’s key focus is getting through administration to ensure Virgin Australia fights another day and has the chance to rebuild,” a spokesperson for the private equity firm said.

“We have developed a plan that will secure approximately 6,000 jobs once market demand recovers, with potential to increase to 8,000 jobs in the future.

“We all want a stronger, more profitable and competitive Virgin Australia coming out of voluntary administration, and will continue to focus on making that happen.”

Virgin’s administrators also welcomed the court outcome.

A Deloitte spokesperson said the administrators “have always been focused on the task at hand, which is to restructure the business and provide a strong foundation for its future under new ownership”.

“Work continues on preparing the report to creditors for distribution on 25 August, ahead of the second meeting on 4 September,” the spokesperson said.

Rob Sherrard, who has been advising the bondholders on their bid alongside four other former executives of Virgin Blue, told Travel Weekly: “We are disappointed in the outcome and are now waiting on advice from the bondholders and their lawyers as to next steps.”

Representatives for the bondholders declined to offer immediate comment. However, it is anticipated that they will pursue further legal action to have their proposed DOCA for Virgin considered by creditors.


Featured image source: iStock/Ryan Fletcher


SEE WHAT PEOPLE ARE SAYING

Leave a Reply

Aviation

Ukrainian airline scraps heels and tight skirts for comfy suits and sneakers

SkyUp Airlines has given its cabin crew uniform a modern update that ditches tight fit, restrictive clothing and high heels for something a bit more suited to the job.

Share

CommentComments

Wholesalers

Intrepid snares majority stake in New Zealand’s Haka Tours and ANZ Nature Tours

The global travel B Corp has kicked off its future growth plans with a 60 per cent slice of not one, but two touring brands.

Share

CommentComments

Aviation

Clive Palmer offloads Qantas shares in protest of airline’s staff vaccination policy

by Ali Coulton

Looks like the mining magnate has taken a break from tweeting his famous Tim Tam poems to shake his fist at the flying kangaroo’s vax policy.

Share

CommentComments

Hotels

Guests forced to hide as heritage-listed hotel break-in causes $30,000 in damage

A group of people have broken down the door of a historic Kalgoorlie hotel, terrorising guests and forcing one woman to hide in a wardrobe.

Share

CommentComments

Events

Get excited, because the European Showcase is coming to a screen near you!

With international borders on the verge of reopening and hype around overseas travel at an all-time high, this event couldn’t have come at a better time!

Share

CommentComments

Destinations

“We can’t live here in hermit kingdom”: NSW to ditch quarantine for international arrivals from 1 November

The big policy shift means that NSW is the only Aussie state to announce quarantine-free international travel.

Share

CommentComments

Cruise

Royal Caribbean axes Ovation of the Seas’ Aussie sailings until end of March 2022

With no clear pathway toward a resumption of cruising in sight for Australia, the cruise giant has canned its domestic sailings once again.

Share

CommentComments

Aviation

Qantas to add new routes from Darwin to Far North Queensland

Qantas seems to have a penchant for the Top End at the moment. This time, the flying kanga is boosting connectivity across northern Australia with a couple of new routes.

Share

CommentComments

Destinations

“Bugger Byron Bay”: Cowra Tourism invites Chris Hemsworth for a visit in delightful new campaign

In this brilliant video, Cowra pulls out all the stops in an attempt to lure the A-lister to stop by, have a “chin wag” and “get on the sauce”. The town even wants to build a four-story statue in his likeness.

Share

CommentComments

Cruise

Princess Cruises welcomes aboard new president

Princess Cruises has a new president. One could even say the Carnival-owned line has found its prince.

Share

CommentComments

Wholesalers

“We have a front-row seat to the climate disaster”: Intrepid CEO urges ScoMo to “go all in” at COP26

The adventure travel company is calling on the PM to commit to at least halving emissions by 2030 and an immediate end to new coal power development. Let’s just hope Prince Charles can convince him to attend.

Share

CommentComments

Aviation

Air New Zealand to transform Boeing 787 into vaccination clinic for special ‘Jabaseat’ flight

A handful of lucky Kiwis will get their COVID-19 jab in a business-class cabin on Saturday as part of a national push to boost the country’s vaccination numbers.

Share

CommentComments