Virgin sale attracts more than 10 potential buyers, says Deloitte

The administrator of failed airline Virgin Australia says more than 10 ‘sophisticated’ parties have shown interest in buying it.

The administrator of failed airline Virgin Australia says “in excess” of 10 parties are interested in buying the struggling carrier, with an outcome of possible sale to be known within months.

Speaking to reporters on Tuesday, Deloitte’s Vaughan Strawbridge said the potential buyers were “sophisticated parties”.

His comments came after Virgin was placed into voluntary administration following a freeze on travel as a result of the COVID-19 crisis that meant it was unable to service its $5bn debt load.

Deloitte’s Mr Strawbridge expects to recapitalise the airline and emerge from administration in a stronger financial position.

“There will be a flyer going out today and an information memorandum going put next week. And then we will finalise a process and timetable at that point”

“We will expect to know what the outcome will be or the likely outcome to be in the next two to three months”

He said there was a wide cross section of parties, including international parties that have expressed an interest in the airline.

Mr Strawbridge declined to provide more details on the possible buyers, saying the process was at a preliminary stage.

“Our intent is to position the business around restructuring”.

Mr Strawbridge said it was too early to say what effect a sale would have on jobs, but said this would be taken into account as part of the recapitalisation.

“As we go through the expressions of interest as they come in we will be very mindful of the impact on all the stakeholders,” he said.

The move by Virgin extinguishes its current foreign ownership, leaving expectations that would emerge from administration as a scaled-down, low-cost, domestic airline once the skies are opened up again post-pandemic.

Several serious bidders are believed to be in play, including Australian-run private equity firm BGH and another consortium involving existing shareholder Etihad Airways. Virgin’s other key existing shareholder Singapore is also expected to be eyeing a continued stake in the collapsed airline.