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

Travel Agents

Company behind Helloworld agencies placed into liquidation

by Huntley Mitchell

Despite the efforts of administrators to keep it afloat, the company couldn’t sustain enough cash flow to survive.

Share

CommentComments

Aviation

Rex scraps break-even forecast for FY21, as Melbourne lockdown bites

The airline’s bean counters have been forced to revisit their FY21 guidance with a red pen.

Share

CommentComments

Events

Wet Gucci bags, a medical emergency and “men peeing everywhere”: Luxe Whitsundays lunch ends in disaster

The coveted event, which Tourism & Events Queensland partnered on, was reportedly cut short by an hour-and-a-half following a medical emergency.

Share

CommentComments

Destinations

Visit Sunshine Coast hires new head of marketing

VSC has appointed a new CMO, who we assume will report to the CEO. We had no intention of using so many acronyms, BTW.

Share

CommentComments

Cruise

“Not asking for special treatment”: CLIA slams government’s cruise ban extension

Staff at CLIA’s Aussie office have been told to give Joel Katz a wide berth today following the Health Minister’s latest announcement.

Share

CommentComments

Wholesalers

Bunnik Tours releases first-ever WA trip

The family-owned tour company has added WA to its domestic repertoire. We hear Dennis Bunnik has also added a few more hits to his karaoke repertoire.

Share

CommentComments

Aviation

Virgin Australia flies in new chief commercial officer

Meanwhile, mooted retirement presents for John MacLeod included a Big Mouth Billy Bass singing fish and a day clock.

Share

CommentComments

Destinations

STUDY: Victoria tops nation with highest return on destination marketing investment

TTF’s Margy Osmond reckons Australian states and territories need to pull their socks up when it comes to tourism expenditure.

Share

CommentComments

Aviation

Influencer exposed for faking business-class flight

The influencer who pulled this stunt is also a French reality TV star and model, which we reckon is the trifecta of most hated professions.

Share

CommentComments

Hotels

Newcastle’s first five-star hotel opens its doors

The hotel is in the city’s iconic Roundhouse building, meaning the hotel bar has a 360-degree view of Newcastle’s skyline, which could prove problematic for those looking for the exit after a few cocktails.

Share

CommentComments

Travel Agents

FCM rolls out global net-zero carbon offsetting program

Meanwhile, Travel Weekly has upped its sustainability credentials with some new office recycling bins. The old ones were getting pretty gross.

Share

CommentComments

Cruise

Royal Caribbean avoids charges over White Island tragedy

The cruise line, which carried 24 Australians to the island on the day of the tragic eruption, is not among the 13 parties facing charges from New Zealand’s work safety watchdog.

Share

CommentComments