Virgin Australia has 20 potential buyers, deal seen by June: Administrators

Sydney

VIRGIN Australia Holdings's administrators said on Thursday that they had given eight potential buyers access to a data room and were negotiating with another 12 about doing so as they seek to sell the country's second-biggest airline by end-June.In an update after a first meeting of creditors owed nearly A$7 billion (S$6.47 billion), administrators from Deloitte Australia said they had appointed Morgan Stanley to run the sales process alongside Houlihan Lokey. Singapore Airlines, which owns 20 per cent of Virgin Australia, has said it has no loans to the airline.

The administrators were appointed this month to restructure and sell Virgin Australia, the Asia-Pacific airline industry's biggest victim of the Covid-19 crisis so far.

The potential buyers that have signed non-disclosure agreements have received access to a data room, Deloitte said in a statement. "In terms of next steps, mid-May is currently the timeframe for the receipt of indicative offers," administrator Vaughan Strawbridge said. "Binding offers will then be required in June." Private equity and distressed situation specialists Apollo Global Management, Oaktree Capital Management and BGH Capital are among the firms that have expressed interest in the purchase. US-based airline investor group Indigo Partners is also looking at a possible deal, sources said.

Deloitte said it would seek court orders to extend by three months a May 22 deadline to hold a second meeting with creditors. Delaying it to Aug 22 would give it more time to investigate the company's affairs and find a buyer, it said.

Virgin Australia owes A$2.3 billion in secured debt to banks and aircraft financiers, A$2 billion to unsecured bondholders, A$1.9 billion to aircraft lessors, and A$450 million to employees. Trade creditors are also owed A$167 million and landlords are owed A$71 million, court documents showed. REUTERS