Aviation

Virgin Blue co-founder and former execs back bondholders’ bid for Virgin Australia

Five former Virgin Blue airline executives have been revealed as the specialist industry advisors supporting the bondholders’ bid for Virgin Australia.

Led by Virgin Blue Airline Group co-founder Rob Sherrard and founding executive Bruce Highfield, the team includes former chief financial officer Manny Gill, former general manager of network operations Andrew Lillyman and former general manager of public affairs Heather Jeffery.

Following months of preparation and two rejections by administrators Deloitte, significant bondholders Broad Peak Investment Advisors and Tor Investments filed documents in the New South Wales Federal Court on Tuesday.

They are seeking orders to get the information and access to stakeholders, that has been denied to them thus far, so that they can finalise the alternative proposal and deed of company arrangement (DOCA) and put it to employees and creditors in time for voting at the second meeting of creditors of Virgin Australia on 4 September.

The airline’s administrators have already accepted the DOCA proposed by private equity firm Bain Capital, who has been busy laying out its blueprint for Virgin Mark II.

However, with the Federal Court recently ruling that the bondholders are well within their right to make a play for the beleaguered airline, there is still a chance that Bain could be pipped at the post.

“In simple terms, we are proud investors and supporters of Virgin Australia and its people,” Sherrard said.

“We believe in the airline, firmly support the vision of management and are confident that Virgin can return to being a successful airline.”

The bondholders comprise close to 6,000 ‘mum and dad’ retail noteholders and more than 30 institutions, who have collectively invested $2 billion in Virgin Australia over the past six years, to help the airline grow.

“Under our plan, Virgin Australia would remain a majority Australian-owned public company, listed on the ASX as opposed to the asset of a privately-owned investment company based in the USA,” Sherrard said.

“We firmly believe our founders and bondholders proposal will result in the best return for all creditors and employees.

“We also want to be very clear that we don’t want to run the airline. That is the job of the existing management team. We are focused on rebuilding our airline through a solid recapitalisation proposal.”

Thirteen institutions, including several large global banks and asset managers, as well as a large number of retail bondholders, have already indicated their support for the bondholders’ proposal.

“We are very keen to speak with employees and engage with the employee unions on the details of our proposal as soon as possible,” Sherrard said.

“Currently under the terms of the Virgin Australia administration, we have not been able to do so.”

There are no plans to rename or rebrand the airline under the bondholders’ proposal.

The NSW Federal Court is expected to hand down its decision on Monday.


Featured image source: iStock/Christopher Malek

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