July 6, 2020 / 1:51 AM / a month ago

Virgin Australia bondholders seek permission to put forward sale alternative

SYDNEY (Reuters) - Virgin Australia Holdings Ltd (VAH.AX) bondholders have applied to the Takeovers Panel for approval to allow them to make an alternative proposal to creditors for the sale of the airline to private equity group Bain Capital, the panel said on Monday.

FILE PHOTO: A Virgin Australia Airlines plane is seen at Kingsford Smith International Airport the morning after Australia implemented an entry ban on non-citizens and non-residents intended to curb the spread of the coronavirus disease (COVID-19) in Sydney, Australia, March 21, 2020. REUTERS/Loren Elliott/File Photo

Singapore’s Broad Peak Investment Advisers and Hong Kong’s Tor Investment Management are also seeking interim orders allowing them to access information including the terms of the Bain transaction, the panel said in a statement.

Bain last month agreed with Virgin’s administrator Deloitte to buy Australia’s second-biggest airline for an undisclosed sum, banking on an aviation industry recovery.

Deloitte selected Bain over a bid from private equity group Cyrus Capital Partners and a debt-to-equity swap proposed by the group of unsecured bondholders owed A$2 billion ($1.39 billion).

Virgin entered voluntary administration in April owing nearly A$7 billion to creditors, including the bondholders. The Bain deal will be subject to a vote by creditors at a meeting in August.

The bondholders have said certain circumstances regarding the administrator’s sales process are unacceptable and have the effect of precluding them from presenting an alternative proposal at the meeting, the panel’s statement said.

In an affidavit filed last week, Virgin administrator Vaughan Strawbridge of Deloitte said the airline would not have enough funds to continue to trade until the August meeting in the absence of interim funding provided by Bain.

A Deloitte spokesman said on Monday the administrator believed the bondholders’ application to the Takeovers Panel was without merit and it would present information to the panel as required to refute all of the claims.

The Takeovers Panel said it had not yet decided whether to conduct proceedings on the application.

Bain declined to comment.

($1 = 1.4366 Australian dollars)

Reporting by Jamie Freed and Paulina Duran; Editing by Shri Navaratnam and Christopher Cushing

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