BGH recruits Moelis as it explores Virgin move

Moelis joint CEO Chris Wyke. Picture: Adam Yip

Australian-based private equity firm BGH Capital is understood to have tapped advisory firm Moelis for a potential recapitalisation of Virgin Australia.

Moelis counts high-profile restructuring experts within its ranks such as Chris Wyke, who is the Australian co-chief executive, and Janna Robertson, who joined the firm as chief operating office from Deloitte, which she left last year.

BGH Capital is understood to have been in discussions with Virgin Australia for about two weeks, a similar time frame to now-voluntary administrator Deloitte’s involvement with the airline, and was in its data room as recently as last week.

The Australian-listed BGH Capital was launched in 2017, beginning fundraising attempts in October of that year and raising $2.6bn for its first fund.

While the firm is cashed up, some suspect that it would unlikely to vie for the airline alone, rather working as part of a consortium.

BGH Capital typically works with Australian Super on deals. It bid for the private hospital operator Healthscope in 2018 and later, education provider Navitas.

Navitas was acquired for more than $2bn and is expected to be facing coronavirus-related headwinds, like others in the space.

Founders and partners of BGH include former TPG Capital executives Ben Gray and Simon Harle, along with former Macquarie Capital head Robin Bishop.

Melbourne-based lawyer Leon Zwier of Arnold Bloch Leibler is also working for BGH.

Other high-profile names to involve themselves in a Virgin Australia recapitalisation are former Macquarie Group boss Nicholas Moore, who is working as a government adviser, while former UBS Australia boss Matthew Grounds has been advising the federal Treasurer’s office, according to sources, and his former offsider Guy Fowler is understood to have a role with Virgin.

Working as administrator of the airline is Deloitte, while Houlihan Lokey’s Jim McKnight is providing restructuring advice on its $5bn-odd debt pile after working on other high profile corporate collapses in the past.

Earlier, Virgin Australia counted UBS as its adviser, while Morgan Stanley has also undertaken work for the airline.

Virgin Australia went into voluntary administration this week with debts of about $5bn after being brought to its knees from the coronavirus travel restrictions.

Sources say 14 parties are believed to be interested in Virgin Australia, for which bids are due in four weeks’ time.

A flyer document has already hit the desks of prospective suitors.