Canadian infrastructure giant Brookfield Asset Management not out of Virgin race

With the shortlist down to four, how will Brookfield engage if it remains an interested party?

The short list of four is then expected to go down to two, with a decision made by the end of June. Picture: AFP

Canadian infrastructure giant Brookfield Asset Management is believe to be still talking to Virgin Australia administrator Vaughan Strawbridge about becoming involved in a bid for the airline.

The Australian understands that while Brookfield had dropped out of the formal bidding process last weekend with several concerns about the process including the tight time frame for the bids and Virgin’s financial position, it remains interested in becoming involved in a bid for the airline and was still having discussions with Deloitte.

Virgin was placed into administration on April 21 with debts of almost $7bn.

Deloitte this week narrowed down the field of contenders for Virgin to four short-listed parties – a consortium involving BGH Capital and the $170bn Australian Super, Bain Capital, and two US bidders, New York-based Cyrus and Phoenix, Arizona-based Indigo Partners.

This followed moves by nine parties including Brookfield which lodged “indicative non binding” bids for Virgin last Friday.

The list was narrowed down to four on Monday – a list which did not include Brookfield, at its request, because of its concerns about the process.

But Brookfield has made it clear it is still interested in being involved if it can.

It remains unclear whether it could re enter the current process as a formally short-listed bidder, particularly if it still has concerns over the process.

But the fact that it has apparently kept the conversation line open with Deloitte signals that it is not out of the process altogether.

A spokesman for Deloitte would not comment on the reports that Brookfield was still in discussions with Mr Strawbridge.

Deloitte is currently in discussions with the four bidders with a view to having them make binding bids by June 12.

The short list of four is then expected to go down to two, with a decision made by the end of June.

Brookfield were always considered a strong contender for Virgin but declined to go ahead to the next stage, which began this week, as a result of a number of concerns.

Strawbridge has always made it clear that he would like to see “competitive tension” in the bidding process and would not rule out interested parties becoming involved in the sales process at some later stage.

While it was believed that Brookfield had dropped out of talks following its decision not to become involved in the current process, the fact that it has continued having discussions with Deloitte shows that it still remains an interested party.