Bonza’s owners bring in financial experts to help with ‘operational challenges’

The US owners of failed budget carrier Bonza have called in financial advisers as another purple tail exits Australia.

The US owner of failed budget carrier Bonza has called in financial experts as the company teeters on the brink of collapse.

Miami-based 777 Partners is currently the subject of 17 lawsuits, including one filed by London asset management firm Leadenhall Capital accusing it of fraud.

Now staff of 777 Partners have been informed that Los Angeles’ B Riley Advisory Services have been engaged to help the company get through various operational challenges.

It comes after Bonza entered voluntary administration a fortnight ago, and a deal to buy Premier League club Everton appeared over.

777 Partners also owns or co-owns a number of other football teams including Melbourne Victory.

An email sent to 777 Partners’ staff said B Riley Advisory Services managing director Mark Shapiro had taken on the role of interim chief operating officer at the firm.

“Mr Shapiro will be working closely with our entire team to ensure we continue to rationalise the business, select the most profitable path forward for our investments and execute on the daily tasks required to resolve some of our operational challenges and run the business,” said the message.

There were also unconfirmed reports 777 Partners’ founders Steve Pasko and Josh Wander had been asked to leave.

B Riley Advisory Services was described on its website as providing “tailored financial solutions to meet the strategic, operational, financial advisory and capital needs of its clients”.

The appointment came a week after the Leadenhall Capital lawsuit, filed in a New York district court, described 777 Partners as a “house of cards on the brink of collapse”.

The case alleged the firm had borrowed USD$350m against assets it did not own, did not exist, or were promised to someone else.

A former Bonza aircraft parked at Melbourne Airport is the latest to be taken out of the country. Picture: Mark Stewart

Leadenhall Capital claimed 777 Partners had then used the funds to finance “risky private equity investments in aviation media and sports”.

Plans for Bonza were announced about five months after the loan was granted to 777 Partners.

At Friday’s creditors meeting, Bonza administrators Hall Chadwick said $76m in loans from 777 Partners were among the carrier’s liabilities.

In total Bonza owed more than $115m including $10.5m to landlords such as airports, $4.6m to lessors, $16m to other traders and $5.3m to employees.

Its assets included an air operators certificate (AOC) computers and office equipment.

Aircraft painted in Bonza livery were being removed from Australia by leasing company AIP Capital, with a second Boeing 737 Max 8 leaving on Saturday.

Melbourne Airport confirmed the departure of “Bazza” which was initially bound for Port Hedland and then Kuala Lumpur in Malaysia.

An airport spokesman said over the past two years they had provided significant help to the airline, and in recent months “our teams have bent over backwards to keep Bonza in the air”.

“Melbourne Airport is a major creditor, but with so many staff and travellers out of pocket we believe it’s appropriate that they are looked after first,” said the spokesman.

“As such Melbourne Airport has waived its right to payment before the departure of the Boeing 737 MAX aircraft being stored here.”
He said they were disappointed to see the “purple tails disappear from Melbourne Airport”.

“We remain willing to work with Bonza’s administrators, our other airline partners or any future new entrants to facilitate more choice for Australian travellers,” the spokesman said.

Originally published as Bonza’s owners bring in financial experts to help with ‘operational challenges’