Bain Capital says it is preparing a second-round proposal to buy Virgin Australia Holdings Ltd, as the private equity group positioned itself as the “strongest” suitor to turn around the bankrupt airline.
Bain said in a statement on Sunday it was “preparing a second-round proposal to become the owner and operator of Virgin Australia … with a long-term mindset and commitment to a well-funded, successful airline”.
The private equity firm is one of four parties shortlisted by administrators to buy Virgin Australia, Reuters has reported, citing people with knowledge of the matter. The others are Indigo Partners, BGH Capital and Cyrus Capital Partners.
Binding offers for Australia’s second-biggest airline will be required from a smaller set of short-listed candidates by June 12, with a sale expected by the end of that month, the Deloitte administrators have said.
The company entered voluntary administration last month owing nearly $7 billion, making it the biggest Asia-Pacific casualty of the coronavirus crisis hitting the global aviation industry.
“We know aviation isn’t going to return to normal any time soon, but Bain Capital is here for the long haul with deep funding to navigate these difficult times,” said Bain Capital Sydney-based managing director Mike Murphy.
“We have the strongest capital base of any of the bidders.”
Bain, which owns Trans Maldivian Airways, did not specify the value of its bid, but said it was “supported” by Jayne Hrdlicka, the former head of Qantas budget airline Jetstar.
Virgin owes $2.3 billion in secured debt to banks and aircraft financiers, $2 billion to unsecured bondholders, $1.9 billion to aircraft lessors, and $450 million to employees.
“We want to bring back the best parts of the Virgin Blue culture and make flying fun again,” Murphy said, referencing Virgin’s first brand name when it opened in the early 2000’s.