Bain gets court nod for Virgin share transfer

The sale of Virgin Australia to Bain Capital will be completed in a week, marking the end of the airline’s administration.

Virgin Australia’s sale to Bain Capital is all but complete after the Federal Court ordered all shares in the airline be transferred to the US private equity firm. Picture: Patrick Hamilton/AFP

The sale of Virgin Australia to Bain Capital will be wrapped up in a week, after a court approved the transfer of all shares in the airline to the US private equity firm.

In a short hearing on Tuesday, Federal Court judge John Middleton granted an application by the administrators Deloitte to allow the transfer, after an independent expert found the shares were worthless.

The move was opposed by two shareholders, Anthony Collopy and Rebecca Chen, who were unhappy about receiving nothing in return for their investment.

Mr Collopy asked the court how the shares could be worthless, if Bain saw value in the company.

“I find it difficult to accept that shareholders must hand their shares across at nil value when there is obviously some value in the company,” Mr Collopy said.

“I’m very disappointed that from the beginning we were not invited to take part in the process and it seemed to be rushed through very quickly.”

Ms Chen expressed similar concerns and questioned the future of (loyalty program) Velocity under “foreign owners”.

Dr Ruth Higgins for the administrators, said Velocity was dealt with by the independent expert’s report, indicating the business was included in the sale of Virgin Australia.

“There has been a genuine attempt to fully communicate with shareholders throughout the life of the administration,” Dr Higgins said.

Justice Middleton said he was satisfied sufficient information had been provided throughout the administration process and he was prepared to make the orders sought by the administrators.

The transfer of all 8.3 billion shares to Bain Capital was a condition of the sale agreement, voted up by creditors on September 4.

A statement to the ASX indicated the transfer and other conditions of the deed of company arrangement would be completed by next Tuesday November 17.

The step will mean Bain becomes the sole owner of Virgin Australia, seven months after the airline went into administration with debts in excess of $7bn.

A long-running court battle over four aircraft engines leased by the airlines also reached a temporary conclusion on Tuesday with Justice Middleton ordering the owners to cover the $1m cost of transporting the items from Melbourne to Florida.

The court was told the engines were ready to be delivered, but the owners Wells Fargo and Willis Lease Finance Corporation would not take them.

Payment of the delivery was the central issue in the case which was originally awarded in the owners’ favour, until an appeal to the Full Federal Court reversed the ruling.

Wells Fargo and Willis have now applied for special leave to appeal the matter in the High Court, in the hope of having the decision reversed and recovering the costs of transport.

The lessors’ barrister, Dr Christopher Ward said they were confident of success.

“Without being parochial we think it has prospects,” he told the court.

“It is a robust argument (and) we are of the view it is one the court will consider seriously, it’s an argument we think should be taken seriously.”

If leave is granted, the appeal is expected to be heard by the High Court before May 2021.