New twist threatens to derail Qld’s Virgin bid

 

QUEENSLAND'S stake in Virgin Australia is under threat as rogue bondholders make a last-minute bid to steal ownership of the airline from American investment giant Bain Capital.

A group of bondholders represented by Singapore's Broad Peak Investment Advisers and Hong Kong's Tor Investment Management will present their plan for the carrier at a meeting of creditors on August 22.

The group won permission from the Federal Court on Friday to present its plan for the airline to creditors, putting the previously-announced takeover of the airline by Bain Capital in doubt.

Federal Court Judge John Middleton said Deloitte was required to provide bondholders access to sufficient information ahead of the creditors' meeting and warned that the sale process could be delayed or terminated if they did not meet these obligations.

"If a creditor at the meeting needs more time or information to consider their position, this could be a reason to adjourn the meeting of creditors," his judgment said.

Bondholders' late charge threatens to derail the Queensland Government's plan to take a stake in the airline, with Queensland Investment Corporation locked down in talks with the Bain Capital bid.

QIC, doing its lobbying on behalf of the State Government, has shunned the resurgent bondholders and instead focused on doing a deal with the presumptive new American owner.

Some Virgin Australia aircraft have been grounded since April. (AAP Image/Dan Himbrechts)
Some Virgin Australia aircraft have been grounded since April. (AAP Image/Dan Himbrechts)

It is understood the State Government has offered equity, working capital and economic incentives to Bain Capital to keep the airline and hundreds of workers based in Queensland.

Bain remains locked in talks with Virgin Australia management over the future of thousands of workers and dozens of routes.

Up to 4000 jobs are tipped to go from the Queensland carrier with long-haul crew and pilots, non-operational staff and workers at the now-defunct TigerAir likely to face the axe as the airline is downsized.

Virgin Australia went into administration on April 21 with debts of $6.8bn owed to more than 10,000 creditors.

Secured lenders and aircraft financiers are owed about $2.28b, while aircraft lessors are owed around $1.88b.

Landlords, including the nation's major airports, are owed about $71m.

 

 

Originally published as New twist threatens to derail Qld's Virgin bid