Virgin Australia owes workers, customers $1.05b
New details about the financial strife facing the airline has been uncovered as administrators reveal the next steps in the sale.
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Virgin Australia creditors will find out on August 19 how much they’ll be paid when American investment giant Bain Capital reveals its formal plans for the carrier.
Deloitte administrators have revealed for the first time how much those creditors are owed by the struggling airline, which collapsed into administration on April 21.
A review of the books and records of the Virgin companies reveal of about 10,247 known creditors, 9020 are employees.
Workers are owed about $451m, in the event of the airline’s liquidation.
Customers entitled to credits for flights which were cancelled due to the pandemic are contingently owed $604m.
Secured lenders and aircraft financiers are owed about $2.2b while unsecured bondholders have $1.98b on the books.
Trade creditors are owed $167m and aircraft lessors $1.8b.
Landlords, which include Australian airports, are owed about $71m.
In a letter to creditors on Friday Deloitte Partner Vaughan Strawbridge revealed the next steps in the sale of the airline.
Bain Capital, which was selected as the buyer on June 26, will provide a deed of company arrangement -formal plans for the airline – on August 12.
The second creditors’ meeting and a transfer of the business to Bain Capital will occur on August 26 if creditors approve.
Mr Strawbridge’s letter was sent amid a week of turmoil where bondholders threatened to derail the sale.
Two institutional bondholders, owed $300m, had sought access to confidential details of the sale transaction with Bain in order to put together their own deed of company arrangement for Virgin.
Although access was denied, the bondholders were told they had the right to put up a new offer at the next meeting of creditors.
Mr Strawbridge did not address the ruling in his letter, pointing out “on June 26, we signed binding transaction documents for the sale of the business to Bain Capital”.
“As such we are not able to accept any alternate offer for sale, and they are committed to buying the business,” he said.