Virgin Australia - discussion

[ozbob]

https://twitter.com/InQldMedia/status/1252492264061964288

[timh]

Yeah, I think Virgin will come out of administration just fine. It's ironic, but they have nothing of value to liquidate anyway, so they can get away with murder on their debts if it keeps the doors open and the cash coming in.

I'd be surprised if the 'new' Virgin is even half the size of the old one. The talk of a full-on budget airline sounds like a mistake, though: I think it'll be a death sentence if they drop frequent flyer, Tiger-ize the whole lot, or even try to compete with Jetstar. Virgin does ok when they stick to the mid market and does badly when they don't.

Yeah I have some inside goss from virgin. Tiger was what was haemorrhaging money, Virgin's best money makers were Economy X and Business class.

Sent from my SM-G950F using Tapatalk

[SurfRail]

They were finally starting to address some of the worst excesses of the Borghetti era, the timing was just bad. 

I suspect the business is viable, but the share register needs to be tidied up and the board needs to be less fractured so they don't get stuck in another management quagmire that leads to them racking up mountains more debt.

[verbatim9]

If Wesfarmers take over Virgin after Voluntary Administration

[verbatim9]

Velocity Global Wallet

Dear member,
We trust this message finds you and your loved ones well, healthy and safe during this unprecedented, difficult, and uncertain time.

We are writing to reassure you that the announcement by Virgin Australia does NOT jeopardize the funds in your Global Wallet Account or your ongoing ability to continue to use the Global Wallet Card as usual. Your Velocity Global Wallet program, account and card(s), will continue to operate without any interruption in service, as they have since the program was introduced in 2013.

We will ensure your Global Wallet Account continues to provide you with great value. In the coming weeks we will be adding new features and benefits, including additional rewards. We will be sending detailed updates in the coming weeks.

It is important to highlight that the money in your Global Wallet Account is held by Cuscal and is completely separate from the assets of either Virgin Australia or Velocity. Further, neither Virgin Australia nor Velocity have access to the funds in your Global Wallet Account. Your Velocity Global Wallet Card is issued by Cuscal and managed by Rêv. Both Cuscal and Rêv operate under the authority of their respective Australian Financial Services Licences. Velocity, the frequent flyer program of Virgin Australia, acts as an authorised representative of Rêv and is authorised by Rêv to assist with Card distribution services.

As always, we are here for you and we value your loyalty and feedback. If you have any questions, do send us an email anytime at support@velocityglobalwallet.com.

Thank you,
Your Velocity Global Wallet Team

[verbatim9]

Daily Mail----> Hilarious calls for BUNNINGS to take over collapsed airline Virgin Australia - complete with inflight sausage sizzles

Hilarious calls for BUNNINGS to take over collapsed airline Virgin Australia - complete with inflight sausage sizzles

Social media users have joined in the speculation about who will take over broke airline Virgin Australia, with some wondering how air travel might change if hardware giant Bunnings was the successful bidder.

[verbatim9]

^^The Bunnings  pic made it to the Daily Mail

[verbatim9]

Business Insider----> Virgin Australia will pay out Velocity Points in cash if it collapses, with money from trust.

[ozbob]

https://twitter.com/australian/status/1253553002054590464

[ozbob]

Brisbanetimes --> Failed airline Virgin Australia owes nearly $7b to thousands of creditors

Virgin Australia owes thousands of creditors nearly $7 billion as fresh details of the failed airline's finances shed light on how difficult it would have been for the carrier to strike any rescue deal.

The airline's directors put the company into administration this week after it failed to pull off a restructure. Virgin, like airlines around the world, has shut down the vast majority of air travel as a result of COVID-19 travel restrictions.

The administrators are now working hard on finding new owners for Virgin and have said at least 10 groups are interested in being a part of the rebirth of the airline. Private equity group BGH Capital is in the race, while transport billionaire Lindsay Fox has also been mentioned as a possible bidder, along with various international interests.

The new figures were made available in court documents filed by Virgin's administrators at Deloitte ahead of a Federal Court hearing on Friday to discuss minor elements of the administration. The report shows that administrators have identified 10,247 known creditors in total (including approximately 9020 employees).

"This is likely to change as more information becomes available. The administrators expect the total number of creditors is estimated to be over 12,000," the documents signed by Deloitte partner and Virgin administrator Vaughan Strawbridge said.

Virgin employs about 10,000 staff and according to the court documents they are estimated to be owed approximately $450.77 million.

The breakdown also shows that Virgin's increasingly angry bondholders who expect to be asked to take the biggest haircut will rank just behind secured lenders in terms of the value of their claims with secured lenders and secured leaseholders owed $2.28 billion and bondholders $1.98 billion.

Other financing groups providing credit for Virgin to lease aircraft are owed $1.88 billion. Trade creditors, ie people who supply services or goods to Virgin, are owed about $166.7 million while landlords are estimated to be owed $71.21 million.

The court documents also show the administrators face a growing issue with working through the company's aircraft leases. "Reaching a determination as to the future status of the leases and identifying any further arrangements that may be relevant has been since their appointment, and will continue to be, a very significant task for the administrators," Mr Strawbridge said.

In administration, Deloitte acts as an independent party to assess Virgin's position and negotiate with creditors about the best outcome for the business. That could include finding new owners to take over the airline and keep it operating or, if that is not possible, selling its remaining assets to pay off as many creditors as possible.

Creditors - including banks, aircraft lessors, customers with credits from cancelled bookings or frequent flyer points and staff owed entitlements - may only receive cents in the dollar for what they are owed.

[verbatim9]

Better to liquidate and let a new airline come in. The airline is only worth 6.2 Billion probably less.

[red dragin]

Well, there goes $600 in fares we had with them.

[verbatim9]

This guy explains airline bailouts well

https://youtu.be/wbdutQndKv8

[JimmyP]

Better to liquidate and let a new airline come in. The airline is only worth 6.2 Billion probably less.

Liquidating now would be lucky to make a quarter of that figure. Best course of action IMO is to do what they can with the debt load and try to sell the remaining company, which is what they're trying to do currently. But it all takes time to work things out.

[verbatim9]

Brisbanetimes

https://www.brisbanetimes.com.au/business/companies/virgin-suitor-indigo-partners-made-play-for-airline-18-months-ago-20200427-p54nmm.html

^^Indigo Partners sounds interesting

[ozbob]

Gold Coast Bulletin -->Tigerair tipped to stay grounded even if Virgin Australia takes off

TIGERAIR may have taken to the skies for the final time with prospective buyers of Virgin Australia unlikely to resurrect the controversial brand, industry experts say.

Tigerair Airways Australia collapsed into administration alongside its parent company Virgin Australia Holdings last week.

Deloitte says about 20 bidders are circling the Virgin Australia brand, eager to take over the running of Australia's second domestic airline.

What role Virgin's low-cost carrier Tigerair will play in any takeover is unclear, but administrators have suggested all options are on the table.

University of New South Wales School of Aviation Professor Tony Webber said the brand had few redeeming features.

"It's got a really poor on-time performance, the worse of any airline in the domestic market," he said.

"Tigerair in my view doesn't have a future in Australia ... based on the financial performance alone and the fact it can't make any headway on Jetstar."

Dr Webber said with ultra-low-cost carrier Indigo Partners eyeing there Virgin Australia Group, there would be little reason for Tiger to exist.

"I think Virgin Australia will come back as a low-cost carrier and there won't be any room for Tiger," he said.

On Friday Tiger International Number1, a dormant entity which was previously a guarantor of unsecured notes, was put into administration.

Strategic Aviation Solutions chair Neil Hansford tipped Tigerair would fail to takeoff again even if Virgin Australia is purchased.

"My prediction is if anything survives it will be a small airline of about 3000 people and it will be in the ultra low-fare area," he said.

"They've already made the people redundant so why do they still talk about the Tiger brand?"

Calls for Virgin to ditch the tainted Tigerair brand were growing louder one month before the COVID-19 pandemic rapidly spread across Australia.

In March Virgin Australia announced five routes flown by the low-cost carrier would be cut, its Brisbane and Sydney bases closed and fleet numbers reduced.

That prompted Brand Institute of Australia CEO Karl Treacher to declare it would "take a miracle to turn Tigerair around".

"In 2019 Tigerair was found to have the unhealthiest reputation in the airline sector – worse than Malaysian Airlines," he said.

"From the 100 most recognisable companies in Australia it finished 98th with only Adani and Centrelink faring worse."

Dr Webber said it was not surprising 20 bidders were eyeing-up Virgin Australia.

"The domestic business over the past five years it's been reasonably profitable," he said.

"There's money to be made, all it has to do is take some cost out of the business, remove the international part of the business excluding the Tasman and just reposition itself as a hybrid carrier."

[ozbob]

https://twitter.com/ozbob13/status/1260230439517564934

[ozbob]

Couriermail --> Queensland launches bid to buy Virgin Australia

HOME Affairs Minister Peter Dutton has slammed the Queensland Labor Government as "chaotic and corrupt" after state Treasurer Cameron Dick revealed ambitious plans for the state to buy Virgin Australia.

Queensland Investment Corporation will launch a bid to buy the embattled airline on behalf of the state in what would be one of the most significant investments in its history.

A consortium led by QIC is rapidly developing a bid for the state to purchase a stake in the Queensland-based carrier ahead of Friday's deadline for non-binding offers.

About 19 bidders are circling the airline, which collapsed into administration last month with debts totalling almost $7 billion.

https://twitter.com/PeterDutton_MP/status/1260486292888072192

After learning of the state's plans, Mr Dutton attacked Premier Annastacia Palaszczuk over the "laughable" bid.

"Premier Palaszczuk has almost bankrupted Queensland, and now in the middle of a crisis they want to buy an airline," he posted to Twitter.

"It is laughable. She 'leads' a government which is corrupt and chaotic."

The Treasurer responded by telling the federal Member for Dickson to "just stick to cruise ships", a reference to the bungled handling of the coronavirus-stricken Ruby Princess.

https://twitter.com/camerondickqld/status/1260511538038706179

Just days into his new role, Mr Dick has tasked the government-owned investment corporation with forming a bid to keep the airline headquartered in Queensland.

"The appointment of QIC, led by CEO Damien Frawley, has enabled work to progress quickly on a comprehensive strategy, to ensure Queensland is best positioned for a successful bid," he said.

"QIC will advise government on all aspects of the bid, including the optimal partner group, the quantum and structure of the state's contribution, as well as probity and governance."

Mr Dick said the government's investment could take the form of a direct equity stake, a loan, guarantee or other financial incentives.

Queensland's bid comes as several other Australian states consider making their own investment in Australia's second-largest carrier.

QIC CEO Damien Frawley said the restructure of Virgin Australia represented a significant opportunity for Queensland.

"We are well-equipped to manage the state's interest in Virgin Australia Holdings should the consortium be successful," he said.

"Virgin administrator Deloitte has set an ambitious time frame and we look forward to delivering on this mandate for the Queensland Government."

Mr Dick said keeping Virgin Australia flying into the state and 2000 people working here was vital to Queensland's COVID-19 recovery.

"We have an opportunity to retain not only head office and crew staff in Queensland, but also to grow jobs in the repairs, maintenance and overhaul sector and support both direct and indirect jobs in our tourism sector," he said.

"Queensland is Australia's home of aviation and with all our competitive advantages, we fully intend to stay that way."

Administrators are hoping to conclude the sale process by June 2020.

"This is a competitive space, but Queensland is a serious contender and our discussions with the administrators have been making progress," Mr Dick said.

[timh]

I did not see this coming

I don't know enough about this to make an educated comment, but from a layman's perspective it does seem like a risky financial move

Sent from my SM-G950F using Tapatalk

[ozbob]

https://twitter.com/jekearsley/status/1260716086363713536

+1

The present mob cannot even deliver basic services for Queensland.

Next?

[SurfRail]

If there's something I trust the Nationals to have a cogent opinion on, it is brain farts.

[Gazza]

https://twitter.com/jekearsley/status/1260716086363713536

+1

The present mob cannot even deliver basic services for Queensland.

Next?

Other than the usual PT failings, they're not really doing too bad in other areas right?
I havent had problems with my other interactions with government.

[ozbob]

The Australian --> Queensland bid to buy Virgin Australia dubbed 'laughable' by Peter Dutton

Home Affairs Minister Peter Dutton has intensified his criticisms of the Queensland government's decision to bid for Virgin Australia, saying the move is "dangerous" and if the bid was successful the airline would be "back on the market in six months."

"They can't run a train system," Mr Dutton told 2GB on Thursday.

On Wednesday, new Queensland treasurer Cameron Dick said the state would make a bid to purchase the airline out of voluntary administration through the Queensland Investment Corporation, in an effort to keep the airline's head office in the state and to keep a second national carrier operating at full capacity.

Mr Dick said the investment "could take the form of a direct equity stake, a loan, guarantee or other financial incentives". The airline went into voluntary administration last month, owing almost $7 billion to 12,000 creditors.

Dubbed Project Maroon by the government, the bid drew criticism on Wednesday night from Mr Dutton who tweeted: "Premier Palaszczuk has almost bankrupted Queensland and now in the middle of a crisis they want to buy an airline. It is laughable. She "leads" a government which is corrupt and chaotic."

But Mr Dick hit back, telling the federal Member for Dickson to "just stick to cruise ships", in a reference to the Ruby Princess coronavirus debacle, which has resulted in the deaths of 22 passengers and been linked to almost 700 COVID-19 cases.

On Thursday morning, Mr Dutton ramped up is attack, saying the bid could be a "con" or a "political stunt" designed to drum up support for the Labor government ahead of the state election in October.

"If they are genuine — don't forget the Premier, every credit card they have is maxed out," Mr Dutton said. "And yet they are saying they want to spend billions, borrow more... to put into an airline during one of the most significant downturns in the world's history.

"I mean, Richard Branson is not proposing to wade in like the Queensland government is doing. I think Premier Palaszczuk needs to come out and say 'this was a bad idea' and drop it ... it's just fanciful."

Mr Dutton also said that financing the deal through the QIC was "dangerous" as it would expose the superannuation money of Queensland public sector workers to significant risk.

"I think it is dangerous, and it should be called out," he said. "Premier Palaszczuk, she might be a nice person, but she's incompetent."

The federal government has refused to bail out Virgin Australia, and Deputy Prime Minister and Transport Minister Michael McCormack said the solution must be market, not government, led.

However, Flight Centre chief executive Graham Turner has backed Queensland's move, and says there's no reason why two airlines can't be profitable if they are properly run. "I see nothing wrong with it and I think it's probably a very positive thing for Queensland," he told ABC radio.

The airline was a crucial driver of the state's $13bn tourism industry before the COVID-19 crisis hit, prompting the government to pull out all stops to ensure it survives as Australia emerges from the current economic crisis.

"My No 1 focus as Treasurer is to retain and create jobs for Queenslanders, particularly as we move beyond the COVID-19 crisis," Mr Dick said.

"We have been very clear: two sustainable national airlines are critical to Australia's economy.

"We have an opportunity to retain not only head office and crew staff in Queensland but also to grow jobs in the repairs, maintenance and overhaul sector and support both direct and indirect jobs in our tourism sector.

"We saw the punishing increase to the cost of flights after the Ansett collapse, and this government will not stand by and let that happen again."

He said the QIC would advise on all aspects of the bid "including the optimal partner group, the quantum and structure of the state's contribution, as well as probity and governance."

The government had offered $200m to rescue Virgin before it went into administration.

QIC chief executive Damien Frawley said the restructure represented "a significant opportunity for Queensland ... We are well-equipped to manage the state's interest in Virgin Australia Holdings should the consortium be successful. QIC's track record as an acquirer, owner and manager of nationally critical infrastructure for the Queensland government and long-term investors supports our bid."

A QIC spokesman later would not say which bodies were partnering with it in the consortium.

However, it is understood that the joint bid will have input from state-based superannuation funds and other commercial investment partners of the QIC.

Mr Dick said administrators were seeking to conclude the sale process by June 2020. "This is a competitive space, but Queensland is a serious contender and discussions with the administrators have been making progress," he said. "Queensland is Australia's home of aviation and with all our competitive advantages, we fully intend to stay that way."

The government's exposure is set to remain at $200m.

[STB]

https://twitter.com/jekearsley/status/1260716086363713536

+1

The present mob cannot even deliver basic services for Queensland.

Next?

yt?
Other than the usual PT failings, they're not really doing too bad in other areas right?
I havent had problems with my other interactions with government.

I haven't had any major issues with other areas of Government either, the health system for me in particular has been good to me, especially given that I've been hospitalized many times since the ALP has come back to power.

To be honest, public transport isn't a major vote winner for the majority of the community, except for Greens voters, some ALP voters and a few Liberal voters.   It's also a fairly major investment to increase PT infrastructure when you're only capturing a small percentage who would vote for it.  It's cultural, car is king, and will probably take a few generations before that changes, in reality.

Also, side note, separation of powers, the Transport Minister certainly doesn't manage the day to day running of the network.  And he/she/they are dependent on how good the advice is from the department and whether it aligns with the party platform.

[verbatim9]

This will be just another drag on tax payers. So many other important projects in the pipeline that would benefit from further investment

[verbatim9]

This will be just another drag on tax payers. So many other important projects in the pipeline that would benefit from further investment

We all know what happened with QR. Inefficiency, bad employment agreements etc ...

[verbatim9]

^^There are many international and domestic private bidders that can get the airline up and running, without Government subsidy.

[Gazza]

Did you just have A conversation with yourself?
Why didn't you just make one post, or use the post edit function?

[verbatim9]

Up to 20 Bidders for VA

https://twitter.com/9NewsQueensland/status/1260918812632907777

[Gazza]

Up to 20 Bidders for VA

https://twitter.com/9NewsQueensland/status/1260918812632907777

You didn't answer my previous question.
Why did you post three times in a row instead of using the post-edit function?

[ozbob]

Brisbanetimes --> Virgin Australia plan for Dreamliner fleet fuels bidder disquiet

Virgin Australia's administrators have proposed the airline buy a fleet of new long-range Boeing Dreamliner 787 aircraft, but prospective buyers are concerned its plan for the collapsed airline ignores how fundamentally COVID-19 has changed the aviation industry.

Nineteen parties are weighing up rescue bids for Virgin following its collapse last month, with preliminary bids due by 6pm Friday, and they have been presented with a confidential management business plan for the relaunched carrier called "Virgin v2.0".

Several sources close to the process, who spoke on the condition of anonymity due to strict confidentiality agreements, said the plan includes buying eight Boeing 787 Dreamliners to replace Virgin's existing international fleet of five Boeing 777s and six Airbus A330s.

Boeing 787s have a "list price" of between $US250 million and $US338 million ($388 million to $525 million) depending on the model, although airlines normally negotiate significant discounts.

Simplifying Virgin's fleet to reduce costs was a core part of chief executive Paul Scurrah's turnaround plan for the airline prior to it entering administration.

The Age and The Sydney Morning Herald previously revealed the business plan, detailed in a memorandum distributed to key bidders, involves maintaining an international network, which was under a cloud because it was a source of heavy financial losses.

Those details come amid growing frustration from potential bidders that Virgin's administrator, Deloitte, led by Vaughan Strawbridge, is asking them to buy a business largely as it was before it collapsed and before the COVID-19 pandemic brought the global aviation industry to a standstill.

Airlines around the world have been devastated by the pandemic and major industry players expect it to take two to five years for passenger demand to recover. Deloitte hopes to secure a new owner for Virgin by mid-August.

More than half a dozen people close to potential bidders or working in senior aviation industry roles expressed concern and disbelief Deloitte was not using its administration powers to more aggressively restructure the airline by reducing its aircraft fleet and considering employee redundancies in recognition that a relaunched Virgin will operate in a significantly smaller aviation market.

"There's no recognition that the market has fundamentally changed," said one source, adding administrators were setting up the winning bidder as the "bad guy" who would have to cut its fleet and workforce after they take ownership.

"They are setting themselves up for the most catastrophic failure - some of the consortiums are close to saying 'ok, fine we'll see you in the liquidation'."

"This is the time to fix it," another source close to one bidder said of the loss-making company. A third said the administration appeared to be controlled by Virgin management, with Deloitte adopting its long-term plan for the airline.

Mr Strawbridge said the criticism was unfounded and parties were able to bid for the airline in any form they wanted. However, he said major restructuring, including around Virgin's fleet and staff headcount, could only be done once the winning bidder was decided.

"Our preference is to sell as much of the airline as possible but everything is on the table, we're not ruling out anything," he said.

Intelligence firm CAPA - Centre for Aviation this week projected that Australia's domestic airline capacity will be at only 49 per cent of last year's levels by October and at 60 per cent by December. International flights will be at just 15 per cent of 2019 capacity by the end of the year.

Deloitte has told potential buyers Virgin could triple its earnings to $1.2 billion in the 2022 financial year, which would be a drastic change in fortunes after being unprofitable for the past seven years and racking up combined losses of $1.9 billion.

Mr Strawbridge has said he does not plan to make any workers redundant. Virgin employed around 9300 people prior to administration, most of whom have been stood down from work during the pandemic. Virgin made 1000 workers redundant in March as the pandemic started to bite.

COVID-19 has devastated airlines around the world. British Airways is making up to 12,000 staff redundant, while US carriers have signalled significant layoffs. Air New Zealand has said it will lay off about a third of its workforce, or around 3500 employees in the coming months.

Ed Bastian, chief executive of Delta Air Lines, which is the world's largest carrier, said last month that a full industry recovery would take two to three years, while jet maker Airbus has said it could take up to five years before passengers travel is at pre-pandemic levels again.

Groups known to be considering a bid for Virgin include US private equity firm Bain Capital, local private equity group BGH Capital and Canadian asset manager Brookfield. The Queensland government on Wednesday announced its intention to bid for the airline, while co-founder Richard Branson is said to be waiting in the wings to join a leading consortium.

[ozbob]

https://twitter.com/ozbob13/status/1260955027033616392

[ozbob]

https://twitter.com/7NewsBrisbane/status/1261033683860873216

[verbatim9]

Business Insider--- Virgin Australia has restarted its Velocity frequent flyer program

[verbatim9]

InQuenesland---Eight bidders signal formal interest in Virgin, short-list of three within weeks

Virgin Australia's administrators have revealed there should be eight indicative offers received at the end of business today with "plenty of competitive tension" between them.

Lead admininstrator Vaughan Strawbridge said that will be reduced down to about three final bidders in a shortlist.
He said the competitive tension was "what's needed to drive the best outcome, an outcome that preserves as many jobs as possible, and the best result for all creditors".

"Virgin Australia plays an incredibly important role in Australia's aviation and tourism industry, employing thousands of people and bringing strong competition as Australia's second airline. Our focus has been on ensuring we sell the business to a new buyer and we remain very confident we can bring Virgin Australia out of administration in a much better financial position," Strawbridge said.

"Indications are strong that we will receive as many as eight indicative offers.

"We will then assess these over the next few days, working with the bidders to fully understand the details of their bids, enabling us to short list parties to participate in the next stage of the process. We expect to have a short list of around three.

Binding offers will be required by 12 June and Deloitte is committed to a resolution by the end of June.

"Up to now, we've certainly seen a high level of interest from a significant number of high quality parties, many of whom are capable of completing a transaction of this size and complexity. Nearly 20 have had access to the data room and eight of these have been sufficiently advanced in their interest, and in the business as a whole, that they have been provided with the forward-looking Virgin 2.0 business plan."

The shortlisted bidders will be given access to more detailed business and operational information, management presentations and workshops as well as key stakeholder interactions from across all areas of the business, to allow them to prepare a definitive and binding proposal.

"We are pursuing an aggressive process, but it's one we are confident we can achieve, and our objective remains to deliver a revitalized, viable, and profitable airline under new ownership," he said.

The statement followed claimed by Treasurer Cameron Dick that the Morrison Government was undermining Virgin through its subsidy to Rex, a regional airline that is contemplating entry into the capital city routes.

He said Rex could threaten the value of the airline because of its potential to add to competition on the major routes between Brisbane, Sydney and Melbourne and it has been reported that the company has received almost $70 million from the Federal Government.

"Given the subsidy they are potentially undermining the value of Virgin on the capital city routes," Dick said.

However, the states also fund Rex and Queensland subsidises the company on a handful of regional routes in the state which it recently had to renegotiate after Rex threatened to walk away.

The Sydney-based Rex will make a decision in about eight weeks and has said that if it does go ahead it will need to raise about $200 million in capital and will launch the service next March.

Economist Gene Tunny said it was understandable that the Government was concerned about what a collapse of Virgin could mean for our regional communities and tourism industry.

"That said, it would be a poor start to the Queensland Future Fund, which QIC is managing, and a bad result for Queensland taxpayers, if one of its major investments, of at least $200 million and very likely more, is in a struggling airline doomed to perpetual second place and continuing to lose money," Tunny said.

"QIC would need to have a very high level of confidence the airline can be turned around.

"Virgin Australia would be a very risky investment for QIC."

Dick said the Queensland Government, through its investment arm, QIC, has been engaging in the Virgin bid in a strategic way and was keeping its cards close to its chest. But he confirmed QIC had been in the data room investigating the numbers.

About 18 parties were engaging with Deloitte over bidding for Virgin and Dick said Queensland was not going to close off negotiations with anyone.

"Out of indicative bids you will get three to a dozen that will be fair dinkum. The people who are not fair dinkum will fall away," Dick said.

"We are going to keep our cards close to our chest. We need to be canny, prudent and careful."

But he said there was "a real risk" that other states could steal the company.

"Other states have expressed and interest. We know there is Victorian interests and we want to ensure that Queensland interests are protected.

"Another purchaser of the airline may not have an interest in in Queensland.

"We can't control all the variables but standing back and not engaging won't help Queensland. That's why we have to stand up."

[ozbob]

SMH --> Virgin cash fears as airline down to its last $100m, Twiggy Forrest makes bid

Virgin Australia is down to its last $100 million and its administrators are looking for new sources of cash to keep it alive amid fears they could run out before finalising the sale of the collapsed airline.

Mining tycoon Andrew "Twiggy" Forrest is behind one of eight indicative bids that Deloitte expected to receive by the end of Friday, The Sydney Morning Herald and The Age can reveal. Deloitte's lead administrator Vaughan Strawbridge said the eight would most likely be reduced to a shortlist of three serious bidders on Monday.

Credit Suisse is advising Mr Forrest, who is expected to try to use the second round of the sale process to team up with one of the leading bidders - private equity firms BGH Capital, Bain Capital and Canadian asset manager Brookfield.

Indian conglomerate InterGlobe Enterprises - which owns 38 per cent of budget airline IndiGo, India's largest airline by passengers and fleet - also made an indicative bid for Virgin on Friday, sources confirmed.

Shortlisted bidders will be able to talk to Virgin's existing management, aircraft lessor, airports and unions to put together their own business plans and make binding rescue bids by June 12.

Mr Strawbridge said he remained confident of securing a new owner by the end of June, which will go to a vote of creditors in mid-August. However, there are growing concerns about Virgin's remaining liquidity and whether it can last until August, according to sources close to two of the leading bidders and one major creditor, who spoke on the condition of anonymity to discuss the confidential matters.

Deloitte confirmed on Friday the airline had $100 million in unrestricted cash thatwould last at least until mid-June. After that, the cash required until a new owner takes control in August would depend on their plan to restart the airline from its pandemic hibernation.

"There will be a future funding requirement but that's not here, that's not now - it is something that we are working through," Mr Strawbridge said in an interview with this masthead.

"The business was after funding prior to our appointment. There are options around additional liquidity, we haven't had to push the button on any of those at this point but we do have options."

Mr Strawbridge said options to raise more cash included funding from banks, bidders or even government support, noting that the Queensland government had offered financial support funding for Virgin before it collapsed last month.

Virgin collapsed in April with debts of almost $7 billion after the COVID-19 pandemic forced it to ground almost its entire fleet and cut off new sources of revenue.

The $US515 billion ($798 billion) Canadian asset manager Brookfield has discussed a joint bid with Queensland state-owned investment powerhouse QIC, which has been mandated to inject $200 million to $300 million to ensure Virgin's headquarters remain in Brisbane. QIC ruled out bidding alone on Friday.

Melbourne private equity firm BGH Capital has teamed up with Australia's largest superannuation fund, AustralianSuper, for its bid.

The $US105 billion ($165 billion) US firm Bain Capital is bidding alone with advice from former Jetstar chief executive Jayne Hrdlicka and restructuring experts KordaMentha, which managed the Ansett insolvency two decades ago.

[ozbob]

Couriermail --> QIC pushes ahead with Virgin Australia plans as four bidders short-listed

A shortlist of four bidders in the push to relaunch Virgin Australia has been released as Queensland's preferred partner in a joint-bid to invest in the troubled airline withdraws from the race.

QUEENSLAND'S preferred partner in a joint-bid to invest in Virgin Australia has sensationally withdrawn from the race as four 'credible' parties make the cut to purchase the airline.

Canadian investment company Brookfield, understood to initially be Queensland's preferred partner, was reported to have pulled out of the process overnight after lodging a non-binding bid on Friday.

Brookfield's decision has created uncertainty around how Queensland Investment Corporation progresses its plan on behalf of the State Government, but a spokesman for QIC revealed it would "continue to engage with all parties about the potential to join a consortium for the next stage".

"QIC will be providing its client with commercial advice about the potential bid and the best way to achieve its broader economic objectives, particularly maintaining Virgin's headquarters in Queensland," he said.

Administrators Deloitte revealed this morning the shortlist, which is understood to be Bain Capital, BGH Capital, Indigo Partners and Cyrus Capital Partners.

Lead administrator Vaughan Strawbridge praised the "strength" of the well-funded and experienced shortlist bidders.

"Importantly, each has a plan for the business which can secure the future for thousands of Virgin Australia employees," he said.

"These parties enable us to seek the best available commercial solution which we are all looking for, while meeting our responsibility to maximise the outcome for creditors and see the airline continue as one of the country's two carriers serving Australians across cities and regions."

Deloitte revealed it had received more interest than anticipated and will work with short-listed bidders over the next four weeks to enable binding offers by mid-June.

"This will involve the sharing of more detailed financial and operational information, management workshops and meeting with as many of the financiers, landlords, suppliers, unions and other stakeholders of the business as possible," Mr Strawbridge said.

[ozbob]

Couriermail --> Virgin Australia CEO calls for airline to focus on domestic network

VIRGIN Australia's future could hinge on it becoming a domestic airline with a fleet of Boeing 737s and a strong frequent-flyer program.

CEO Paul Scurrah has held three-hour presentations to two of the bidders for the embattled airline, which went into voluntary administration in April with debts of $6.8 billion.

Mr Scurrah, as reported by The Australian, said the airline could prosper if it ditched its current fleet of aircraft in favour of a line-up of Boeing 737s.

He also called for the domestic network to be rebuilt from scratch, instead focusing on high-demand lucrative routes.

Savings could be made via negotiating costly contracts with Wi-Fi providers and caterers, The Australian reports.

Meanwhile, Deloitte has held a meeting with 35 creditor representatives including unions, airports, banks, bondholders and suppliers.

It revealed that urgent funding was needed if Virgin Australia was to keep flying and keep pace with rival Qantas.

Government subsidies end on June 11 with an existing $100m in cash expected to see the airline through till the end of July.

The meeting heard administrators were eyeing up to $238m in restricted cash, tied up against hedging and in merchant and credit card facilities, The Australian reports.

[ozbob]

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