Indian billionaire Rahul Bhatia is understood to have hired advisory firm Investec to compete for Virgin Australia ahead of expressions of interest due for the collapsed carrier on Friday.
It is understood that Mr Bhatia is pursuing Virgin Australia through his company InterGlobe enterprises, with numerous Australian tourism and aviation experts in tow.
He is the founder and largest shareholder of the Indian budget carrier IndiGo, although it is his company rather than the airline that is putting forward the Virgin Australia proposal.
Other firms assisting his bid include law firm Corrs Chambers Westgarth and accounting firm PwC.
Virgin Australia, founded by British tycoon Richard Branson, entered voluntary administration last month and owes $6.8bn of debt.
Involved in a sale process being run for the airline is administrator Deloitte, restructuring firm Houlihan Lokey and investment bank Morgan Stanley.
Should Mr Bhatia’s interests secure Virgin Australia, the thinking is that there would be strong expertise applied to transforming the failed carrier into a profitable airline and plenty of financial firepower.
Rahul Bhatia and his father, Kapil, have an estimated fortune of $US3.4bn ($5.3bn)according to Forbes, and already, InterGlobe has invested in Australia’s tourism industry, with a hotel development in Melbourne.
They own about 51 per cent of the airline IndiGo, which the Bhatia’s founded with Rakesh Gangwal.
It is the largest carrier in India by passengers and has a market value of about $5bn after listing around 2015.
InterGlobe will be going up against other private equity suitors, including Brookfield, BGH Capital, advised by Moelis, and the KordaMentha-advised Bain Capital, which also has former Jetstar boss Jane Hrdlicka in its corner.
Macquarie Group was earlier working with Brookfield, but the Australian financial is understood to be no longer in the mix.
The thinking is that Mr Branson could emerge with an involvement in a consortium.
Others mentioned as possible suitors are Wesfarmers and Andrew Forrest, along with Oaktree and state governments such as the Queensland state through the Jefferies-advised Queensland Investment Corporation and other airline interests, such as Etihad and Singapore’s Temasek and airport interests.
Information memorandums circling promote the opportunity to turn Virgin Australia into a profit-making airline, with the sales pitch involving a forecast of $1.2bn of earnings before interest, tax, depreciation and amortisation with $5bn of revenue in 2022 as earlier reported by The Australian this month.
However, some believe that the field will considerably narrow when the sales process heads towards its conclusion next month for what is a highly complex and challenging asset.
A key consideration for any successful bidder will be whether key management is retained and on what terms.
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