Virgin Australia launches selloff process

Now begins the difficult process of narrowing down a buyer for Virgin Australia. The Australian government refused to cough up aid for the rescue act.

Image Credit: AP

Brisbane: Administrators of Virgin Australia Holdings Ltd. invited prospective buyers to examine financial information about the business, days after the carrier became Asia’s first airline to fall to the coronavirus.

Suitors signed non-disclosure agreements and started due diligence in a so-called data room. About 10 parties including private equity firms received marketing materials.

Administrators at Deloitte aim to restructure the carrier, which had more than A$6.84 billion ($4.4 billion) in outstanding debts owed to more than 10,000 creditors based on an initial review released Friday, and find new owners within months.

Virgin Australia called in administrators this week after it stopped virtually all flights because of the pandemic and its request for state aid failed. The Brisbane-based company had asked the government for a A$1.4 billion loan, convertible into equity, to see it through the crisis.

The carrier has furloughed 80 per cent of its 10,000 workers but will continue to operate some flights for essential workers, freight and the repatriation of Australians. Virgin Australia’s frequent-flyer programme is a separate company and is not in administration.