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Virgin Australia Creditors Approve Airline's Purchase By Bain Capital

Virgin entered administration in April owing A$7 billion ($5.1 billion) to creditors after suffering from a sharp plunge in demand because of the coronavirus pandemic.

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Virgin Australia Holdings Ltd's creditors on Friday approved the purchase of Australia's second-biggest airline by U.S. private equity group Bain Capital, according to a statement from the Transport Workers' Union.

The union, representing some of Virgin's 9,000 employees, said it welcomed approval of the deal, which will allow the carrier to exit voluntary administration.

A Virgin spokesman did not respond immediately to a request for comment.

Virgin entered administration in April owing A$7 billion ($5.1 billion) to creditors after suffering from a sharp plunge in demand because of the coronavirus pandemic.

The Bain deal will give unsecured creditors a return of 9% to 13% of their investment and involves a financial commitment of A$3.5 billion, according to administrator Deloitte.

Under Bain's business plan, Virgin plans to cut a third of its workforce as part of an overhaul to focus on being a domestic and short-haul international Boeing Co 737 operator competing against Qantas Airways Ltd.

(Reuters)


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virgin australia bain capital COVID-19 administration