Sale memorandum to give potential bidders a peek inside the Virgin Australia books

A sale memorandum will today reveal to potential bidders just what exactly is up for grabs at the embattled airline.

Virgin Australia aircraft are seen parked on the tarmac at Brisbane International Airport. Picture: Patrick Hamilton/ AFP.

Virgin Australia Administrator Vaughan Strawbridge is today due to circulate the lengthy information memorandum for the proposed sale of the company.

Expressions of interest are due to be lodged next Friday.

At this stage the documents are being sent to just a handful of prospective buyers as consortiums are still working together on just who will be bidding next week.

The intended buyers will also be keen to have full due diligence to help assess the assets.

Consortiums include one led by Brookfield with Macquarie Bank, Wesfarmers and QIC, another led by Bain and Co and by BGH which is said to include Lindsy Fox and perhaps Melbourne Airport.

Virgin Group headed by Richard Branson is another interested party likely to join one of the groups.

The sale booklet was prepared by Morgan Stanley, Deloitte, lawyers Clayton Utz and insolvency specialists Houlihan Lokey.

The central question for potential buyers will be what is actually being sold because most of the assets are heavily mortgaged with the company’s debt totalling $6.8bn.

The airline in normal times generates over $5bn in annual revenue and its 9000 staff have a prized corporate culture, which is a key selling point.

But potential buyers have pointed to expensive labour and inflexible contracts along with sale contracts for its myriad different aircraft as being negatives.

Attention is focused in particular on its six wide bodies A330 planes and its five B7777.

Virgin’s domestic routes are covered by five different aircraft which makes management more complicated.

On top of the prized corporate culture the asset also comes with implicit federal government backing given Treasurer Josh Frydenberg, ACCC chief Rod Sims and others stressing the need for Australia to have a strong competitor to Qantas.