Virgin Australia has extended its trading halt on the ASX as the airline continues to work out its financial future.
After entering a trading halt on Tuesday until today, Virgin this morning requested for it to be extended by seven days or until the company announces if and how it will be financially rescued.
In the trading update, Virgin said is continuing to consider the issues brought about by the COVID-19 crisis, including discussions around financial assistance and restructuring alternatives.
“Whilst this consideration and these discussions have continued over the last two days, including discussions which remain confidential and are incomplete, the company is not presently in a position to make an announcement to the market with respect to these matters,” it said.
Travel Weekly understands the company’s discussions with the government for a $1.4 billion bailout to help survive the impact of COVID-19 are ongoing and have so far been constructive.
Virgin is also understood to have appointed Houlihan Lokey to advise on the restructuring of its $5 billion debt.
While assistance from the federal government appears to be Virgin’s preferred option, it is also seeking support from outside investors.
According to The Australian Financial Review, Virgin Australia’s biggest shareholders – Etihad Airways, Singapore Airlines, Nanshan Group and HNA Group – have passed up the opportunity to provide an equity injection.
That leaves Richard Branson’s Virgin Group, which owns 10 per cent of Virgin Australia, and/or other investors that could rescue the struggling airline.
Watch this space.
Featured image credit: iStock/Andrew Hanlon