Virgin Australia sale by the end of June ‘achievable’

The first Virgin creditors’ meeting wrapped up in just over an hour, amid reports billionaire Andrew Forrest had emerged as a potential buyer.

Virgin Australia Airbus A320, blocked by a vehicle at Perth Airport. Picture: Geoffrey Thomas

The first creditors’ meeting of the Virgin Australia administration has wrapped up in just over an hour, amid reports mining billionaire Andrew Forrest has emerged as a new potential buyer.

More than 1000 creditors and observers logged on for the electronic meeting hosted by administrator Deloitte, who are aiming to restructure and recapitalise the airline.

Virgin Australia went into voluntary administration last week with debts of $6.8bn.

The meeting heard non-binding offers for the carrier were due by May 15, with the data room currently open to bidders.

Administrator Vaughan Strawbridge would not reveal the identity of the parties, but said eight had signed nondisclosure agreements and negotiations were continuing with a further 12.

“We are now moving quickly to finalise a business plan to help guide interested parties and, in terms of next steps, mid-May is currently the time frame for the receipt of indicative offers,” Mr Strawbridge said.

“Binding offers will then be required in June. We remain confident that our target of achieving a sale by the end of June is achievable.”

Questions were invited from participants with about 17 answered by Mr Strawbridge who reiterated there were no plans for redundancies among the remaining 9020 staff and there would be no new enterprise bargaining agreements negotiated.

“We remain strongly focused on restructuring and refinancing the business, creating a viable operation that will appeal to prospective new owners, and bringing Virgin out of external administration as soon as possible in an outcome that will retain jobs and the airline’s contribution to Australia and its economy,” said Mr Strawbridge.

Among those believed to be in the running are private equity firm BGH Capital, US-based airline investor Indigo Partners, Wesfarmers and Macquarie.

Mr Forrest was reported in business media to be consulting Credit Suisse for advice on a possible Virgin Australia bid through his West Australian investment group Minderoo.

The Australian has contacted Mr Forrest and Minderoo for confirmation.

Close to 70 nominations were received for the committee of inspection which will serve to represent creditors in meetings, and set the parameters for payment of the administrators.

Among the nominees was Velocity Rewards – the Virgin frequent flyer program – which is one of up to 12,000 creditors owed money by the airline.

The company is the only one in the Virgin Australia Group not in administration and is listed as a creditor due to a $150m loan made to the airline in 2014.

A 33-member committee is expected to be selected by next Tuesday.

A second creditors’ meeting is likely to be delayed until August 22 to give Deloitte more time to investigate the airline’s affairs and find a buyer.

CEO Paul Scurrah is continuing to oversee Virgin Australia’s operations, which have been reduced to a skeleton network of government-subsidised and charter flights.

The majority of the airline’s 133-aircraft have been grounded, 11 of which have been seized by Perth and Adelaide airports over non-payment of fees, in the vicinity of $26m.

Mr Strawbridge acknowledged Virgin employees for the support they had provided “at a time marked by so many challenges”.

“We remain acutely aware of the impact this process has on employees and know they want to be flying again as soon as possible,” he said.