Bonza’s administrator granted more time to find a buyer for collapsed budget carrier

Bonza’s administrators have two more months to find a buyer for the collapsed budget carrier in the hope of returning the airline to the skies.

Bonza’s administrators have won two more months to try to find a buyer for the budget carrier, after the Federal Court granted an application for the extension.

The 15-month-old airline appointed Hall Chadwick as administrators after leases on its small fleet of Boeing 737 Max 8s were terminated by the lessor, AIP Capital last month.

The move forced Bonza to cancel all flights, leaving more than 57,000 customers out of pocket, and over 300 employees unpaid for their work in April.

Since then, all but one of the aircraft has been taken out of the country, minimising the chances of Bonza returning to the air anytime soon.

Despite the grim situation, Hall Chadwick told the court, they wanted more time to maximise the chances of Bonza’s business continuing in existence.

Barrister James Hutton told Justice Ian Jackman no deed of company arrangement proposal had yet been received, and it was a “period of uncertainty” for employees who remained stood down without pay until at least Wednesday.

“The employees’ position and whether it is possible for employees to continue as employees of Bonza will be known at the time when binding deed of company arrangement proposals are received,” said Mr Hutton.

“They have the possibility of gaining a greater recovery; the possibility of continuing in employment with Bonza, which is not a possibility if the company goes into liquidation.”

Bonza cabin crew with CEO Tim Jordan before the airline collapsed.

Mr Hutton also pointed out that other creditors stood a better chance of receiving some sort of return if Bonza was sold as a going concern rather than wound up.

The court heard trade creditors were owed $15.9m by Bonza, and landlords such as airports owed $10.5m, among liabilities totalling $116m not including what was owed to customers.

“The point I’d make in light of those liabilities if the business is sold as a going concern, is your honour could reasonably anticipate significantly improving the position of creditors,” he said.

Details of any interested parties, including those given access to a data room, were subject to a non-publication order.

However, court documents said Bonza’s US owner 777 Partners had expressed interest in restructuring the airline along with its Australian holding company 777 Holdco which was joined to the administration.

Justice Jackman granted the administrators’ application for an additional two months, noting that there was “no opposition” and two months was a relatively brief period.

“I accept that the extension of the convening period sought is in the best interest of the creditors of the company and the extensions sought should be granted,” ordered Justice Jackman.

“The administrator’s view is that a sale of the business and execution of a deed of company arrangement is likely to result in a better outcome for creditors than immediate liquidation.”

He said if the convening period was not extended, the administrators would very likely have no option but to recommend to creditors that Bonza be wound up.

The extension meant the second creditors meeting, scheduled for June 4, was now set to take place on August 5.

Hall Chadwick would put any proposals from potential buyers to creditors at the meeting for them to vote on, determining the future of Bonza.

Originally published as Bonza’s administrator granted more time to find a buyer for collapsed budget carrier