The next stage in the sale of the business and assets of Virgin Australia is underway, with the airline’s administrators having made a decision on the final two bidders.
After assessing the five non-binding indicative proposals received on Friday, Deloitte’s administrators and their advisors have selected Bain Capital and Cyrus Capital Partners as the final two bidders.
Lead administrator Vaughan Strawbridge said both parties are well-funded, have deep aviation experience, and see “real value” in Virgin and its future.
“We would like to thank all interested parties for the strong interest they have displayed in the business and their commitment to the process over recent weeks,” he said.
“We will now spend the coming weeks facilitating in-depth bidder engagement with the stakeholders of the business and work closely with both preferred bidders in the lead-up to binding final offers being received.
“The strong interest coming from all parties has generated the competitive tension we have sought that is important in a process such as this, and we are in a strong place when it comes to delivering the best possible commercial outcome for all creditors, and to see a strong and sustainable Virgin Australia emerge from this process.”
BGH Capital and Indigo Partners were the other two shortlisted bidders for the airline, while Brookfield – which was originally in the bidding race for Virgin, but pulled out over concerns about the process – reportedly surprised the administrators by putting forward an eleventh-hour bid on Friday.
Strawbridge said it was still the intention to have a binding agreement in place by 30 June.
“There will also be speculation that entities associated with the parties that have not moved into this next phase, as well as others, could become involved in some capacity with the remaining parties,” he noted.
“That will, of course, be a matter for them.”
Transport Workers’ Union (TWU) national secretary Michael Kaine said it was now up to the final two bidders “to show they can follow through on their commitment to ensure the best outcome for the Australian community and Virgin workers”.
“The TWU remains focused on bidders willing to engage constructively with the workforce and its representatives, which are planning to get the fullest possible Virgin back in the sky and which have a strong commitment to staying with the asset for the long term,” he said.
Kaine also blasted the federal government over its role in the administration process for the beleaguered airline.
“The federal government continues to jeopardise a successful outcome by staying a silent and passive observer, rather than assisting the administration process by making clear funding and regulatory commitments to guarantee the future of the airline,” he said.
Featured image: iStock/Andrew Hanlon