Melbourne Airport seeks McGrathNicol advice in crisis

Melbourne Airport says the advice it received was not related to the solvency of the airport or its operations. Picture: Tricia Watkinson

Melbourne Airport has emerged as the airport that has been seeking advice from insolvency experts McGrathNicol to handle the impact of COVID-19 disruptions.

It comes after DataRoom reported on Thursday that the insolvency firm was working with either Sydney or Melbourne airport.

Melbourne Airport is owned by AMP Capital, IFM, Deutsche, The Future Fund and Morrison & Co and is considered to have a very conservative capital structure with enough reserves to withstand another 12 months of COVID-19-related challenges, say sources.

An airport spokesperson said McGrathNicol provided the airport with discrete advice on certain issues from time to time, but it was not related to the solvency of the airport or its operations.

Airports have been seeking assistance in recent months on negotiating with lenders, as the chances of a return of large air traffic volumes look increasingly slim in the short term, especially with a second major COVID-19 outbreak in Victoria and signs of the virus in southwest Sydney.

McGrathNicol is also likely to be offering advice on how to handle the collapse of Virgin Australia, which is soon to be bought by private equity firm Bain Capital. At least one of the airports is an unsecured creditor.

McGrath Nicol’s Melbourne airport advisory role comes after the owner of Cairns and Mackay airports earlier hired Gresham to assist in negotiations with its lenders due to COVID-19 revenue pressures.

JPMorgan Asset Management owns 66 per cent of North Queensland Airports, while other owners include The Infrastructure Fund, managed by Macquarie, and the Perron Group.

The listed Auckland International Airport raised $NZ1.2bn ($1.1bn) to tide it over until the end of next year. The raise was well supported.

Air New Zealand is also expected to raise equity with potential assistance from KPMG, UBS, Jarden and Forsyth Barr.