Bizarre twist in Bonza administration as 777 Partners re-enter the picture
Bonza’s US owners have expressed interest in restructuring the airline to give it a second shot at success, administrators say.
Business
Don't miss out on the headlines from Business. Followed categories will be added to My News.
Administrators for collapsed budget carrier Bonza have revealed the airline’s US owners 777 Partners have expressed interest in restructuring the company.
The surprising development was outlined in documents lodged with the Federal Court by Hall Chadwick, which is seeking a two-month extension to its appointment in the hope of achieving a sale.
Bonza went into voluntary administration on April 30 after the airline’s small fleet of Boeing 737 Max 8s were repossessed by AIP Capital, forcing the cancellation of all flights.
It was later revealed Bonza owed in excess of $110m to about 60,000 creditors including customers, employees, airports, traders and 777 Partners.
Despite trying to convince AIP Capital to return the aircraft to Bonza’s service, Hall Chadwick was unsuccessful and to date four of the five jets have been taken out of the country.
Nevertheless, the firm remained hopeful of finding a buyer for Bonza rather than winding up the company.
Court documents filed on Thursday outlined why Hall Chadwick needed more time to conduct a sale campaign which it claimed was in the “best interests of creditors”.
It was noted winding up the company would deliver a faster resolution for employees who were not paid for the month of April, but a sale would ensure a better outcome for more creditors.
To this end, the administrators had been informed by 777 Partners on May 21 the firm “may wish to propose a deed of company arrangement (DOCA) to restructure Bonza and (Australian holding company) 777 Holdco as a group.
“The administrators have not yet received a proposal for a DOCA from 777 Partners,” said the affidavit of Hall Chadwick partner Brett Kijurina.
The Miami-based 777 Partners, led by Josh Wander and Steve Pasko, have remained silent on Bonza since the airline’s collapse.
The firm recently called in restructuring group B Riley Advisory Services to help with its own “operational challenges” amid a botched attempt to buy Premier League club Everton and mounting lawsuits.
In one case filed in a New York district court, London asset management company Leadenhall Capital accused 777 Partners of fraud, describing the company “as a house of cards on the brink of collapse”.
It is expected any proposals from potential buyers would be put to Bonza creditors at a second meeting, which could now be pushed back to August instead of June 4 as scheduled.
Hall Chadwick explained to creditors the “main purpose of the extension is to provide the administrators with further time to conduct a sale process for the companies’ business and assets”.
It was acknowledged Bonza’s most valuable asset was its air operators certificate (AOC), which was in danger of being cancelled in the event the company was wound up.
“Our understanding is that the AOC is not capable of being transferred to another entity and can only be used by the party granted the certificate,” said the court documents.
“Accordingly, we understand that the only way the AOC can be acquired by an interested
party is if they were to acquire the shares in Bonza.”
The interlocutory application would be heard by the Federal Court on Monday May 27.
Employees have been stood down until at least May 29 and flights cancelled until then.
Any extension of the administration would guarantee Hall Chadwick a sizeable pay cheque, with the firm estimating its bill for one month’s work to be between $250,000 and $300,000.
An additional two months was likely to take the bill close to $1m.
Bonza first took to the skies in January 2023 with a model of servicing regional areas on routes not operated by other airlines.
An Australian Competition and Consumer Commission report released this week said Bonza carried 2 per cent of the domestic market and its sudden demise represented a loss of opportunity to grow into a larger competitor.
Originally published as Bizarre twist in Bonza administration as 777 Partners re-enter the picture
Gadens unveils national merger
Gadens has announced a national merger as it unveils plans to expand in key markets such as Queensland and NSW and become the pre-eminent full service law firm.
$100m Olympics fund on starting blocks
Some of Australia’s best fund managers will invest on the stockmarket to raise money for Aboriginal and Torres Strait Islander athletes, under a new plan set for the end of the year.