Virgin Australia Financially Secure? [Now in Voluntary Administration]

[jakeseven7]

Our premier sounding a little shrill as Melbourne circles like a shark

‘Absolutely ridiculous’: Queensland slaps down Melbourne Virgin pitch

Queensland’s Premier has branded Melbourne Airport’s pitch to woo a revived Virgin Australia away from Brisbane as “Absolutely ridiculous”.

australianaviation.com.au

 

[RooFlyer]

Pardon my ignorance as this kind of stuff is well outside of my boundaries but are the major shareholders up for any of these debts or is their liability in all this effectively over?

Shareholders are not liable for the debts of the company; in general, shareholders lose their shirt by the value of their shares (their equity) reducing in value, potentially to zero.

but the directors will have more liability than shareholders if they are found to have breached the corporations act for insolvent trading or breaching the director's duties when in office

From what's been disclosed, the company was not insolvent. The directors put the company into voluntary administration as they could not see a viable way forward. this was a 'conservative' way forward.

 

[tomlee1986]

Our premier sounding a little shrill as Melbourne circles like a shark

‘Absolutely ridiculous’: Queensland slaps down Melbourne Virgin pitch

Queensland’s Premier has branded Melbourne Airport’s pitch to woo a revived Virgin Australia away from Brisbane as “Absolutely ridiculous”.

australianaviation.com.au

I am not surprised by that... all premiers would do the same for their state

Post automatically merged: Apr 24, 2020

Shareholders are not liable for the debts of the company.



From what's been disclosed, the company was not insolvent. The directors put the company into voluntary administration as they could not see a viable way forward. this was a 'conservative' way forward.

I am just using that as an example to illustrate a point.. not saying they are trading insolvent - that's why I said they are liable "if" they are found to have done such an act in my original post

 

[travel_bug]

From what's been disclosed, the company was not insolvent. The directors put the company into voluntary administration as they could not see a viable way forward. this was a 'conservative' way forward.

Whilst being advisable on the whole to avoid insolvency and any breach of director's duties, I also wonder whether that conservative approach was taken to ensure the protection of the shareholders' execs who have non-executive directorships with VA

(M. Tan from SQ, K. Xing from Nanshan, H. Wei from HNA and R. Gammell from EY).​

 

[tomlee1986]

Whilst being advisable on the whole to avoid insolvency and any breach of director's duties, I also wonder whether that conservative approach was taken to ensure the protection of the shareholders' execs who have non-executive directorships with VA
(M. Tan from SQ, K. Xing from Nanshan, H. Wei from HNA and R. Gammell from EY).

That would be up to the administrators to find out if the non executive directors did all they could to help the company as it is their job to do...

Their role is to attempt to save the company, protect their assets, and also figure out what happened up to the point of administration.

 

[RAM]

Equal representation regulations require that workers and employers have equal representation on Industry Fund Boards.

Were those laws repealed?

No. Never let the law get in the way of snouts-in-the-trough though. If you analyse the growing Industry funds since the mid 90s you will see an clear trend.

How do you define an employer? ACTU employs staff as does every union in each industry....

Relatives of unionists own companies working in the same industry coincidentally. So do unaligned employers who don't want 'issues'.

Reality most Industry funds are controlled by the ACTU. Just think about some of the deals that were unearthed over the last 5 years where new wage deals were actually a worse outcome for workers but agreed to by the respective union/ACTU rep & employer's group. Quid Pro Quo.

Hint: Do a search for which Industry funds use IFM as their consultant....

So, there's potentially a lot of firepower out there if Industry funds decide to invest 9 weeks of inflows to resurrect Virgin Australia.

Yes, that's all it would represent for the Top Ten Industry funds - almost a rounding error.

 

[Bagpuss]

In summary according to a Reuters article.

Total debt of VAH: US$4.4B (AUS $6.9B )

Breakdown in AU$
$2.3B Secured Debt
$1.9B in aircraft leases
$450million - Staff Wages/Entitlements
$167million - Trade Creditors
$71million - Landlords (assuming Airport leases)
$2B Bonds

Source: Virgin Australia owes $4.4 billion to creditors, to seek waiver on aircraft leases: administrator

{Edit: Numbers switched and corrected).

I would have thought that some of those are liabilities.
IE I expect they dont owe $1.9B for aircraft leases but have to pay $1.9B going forward to comply with the current aircarft leases as per the current contracts.
Like wise with Stage Wages/Entitlements, it's a liability and only payable when due.
Debts and liabilities are two different things.
Article states Virgin is bankrupt, which is not correct either.

 

[Carrots]

From what's been disclosed, the company was not insolvent. The directors put the company into voluntary administration as they could not see a viable way forward. this was a 'conservative' way forward.

Well said -

This point is exactly what has been missed by pretty much every single journalist (is it even right to call them that these days given how terrible they can be!) who's created some form of diatribe to justify their wages - the company has not yet gone bust. Could it? Sure, potentially, but seems somewhat unlikely.

 

[p--and--t]

Interesting that some reports say EY is included in one of the consortiums looking to takeover Virgin. What does it say that they had no money to save it in its current form? Unhappiness with the current board/shareholder structure. Looking to swoop after existing shareholder value has been wiped out?

 

[Quickstatus]

Note that industry super via their wholly owned fund manager IFM investors part own

MEL, BNE, ADL,PER, DRW, ASP, TCA

 

[Quickstatus]

There is money around but they don’t want the debt.
Let the shareholders take a haircut first. If they want to re- invest capital then good.

Stop paying Branson $$ to use the word Virgin
VA to be a LCC. Stick to profitable routes.

 

[get me outta here]

The reason say Australian Super (an industry fund), does well as many on here pointed out when there was an offer to put some cash in and reap some FF points 6-12 months ago, is that it is a not for profit with some of the best returns.

When I wanted to choose a super fund at the time I got serious about my super some time ago I compared the returns carefully and went for a not for profit fund as it simply showed better returns.

Coming out of the banking Royal Comm, I had no reason to regret that decision, talking about "snouts - in - the - trough" as you say.

Reading your other post on your thoughts on industry funds just a few hours ago. So, not sure what the sensitivity is on industry funds. If anyone wants to see who the Board etc is it easy to see online. But, this seems to be a beef on the ACTU which is hardly what this thread is about so could be considered OT.

The vast majority of union members are people like nurses, retail, teachers etc, hopefully they are doing Ok too in their industry funds too, not run by the ACTU.

No. Never let the law get in the way of snouts-in-the-trough though. If you analyse the growing Industry funds since the mid 90s you will see an clear trend.

How do you define an employer? ACTU employs staff as does every union in each industry....

Relatives of unionists own companies working in the same industry coincidentally. So do unaligned employers who don't want 'issues'.

Reality most Industry funds are controlled by the ACTU. Just think about some of the deals that were unearthed over the last 5 years where new wage deals were actually a worse outcome for workers but agreed to by the respective union/ACTU rep & employer's group. Quid Pro Quo.

Hint: Do a search for which Industry funds use IFM as their consultant....

So, there's potentially a lot of firepower out there if Industry funds decide to invest 9 weeks of inflows to resurrect Virgin Australia.

Yes, that's all it would represent for the Top Ten Industry funds - almost a rounding error.

 

[p--and--t]

A bit bemused by the public statements by RB in the last few days.

Wanting the gov to support with money VA when he didn't.
Wanting the gov to support VA when he previously said the UK gov under no circumstances should support BA when they were in trouble.
Telling the staff he was going to work to save VA only *after they went into administration* and he can't influence the outcome from an independent administrator (unless he stumps up the cash he says he doesn't have and didn't before administration).

Wanting the UK gov to stump up money to save VS when he told them not to save BA
Wanting the gov to stump up money for VS when he didn't
Wanting the UK gov to use taxpayers money for VS when he moved to a tax free haven not to pay UK taxes

 

[dajop]

A bit bemused by the public statements by RB in the last few days.

Wanting the gov to support with money VA when he didn't.
Wanting the gov to support VA when he previously said the UK gov under no circumstances should support BA when they were in trouble.
Telling the staff he was going to work to save VA only *after they went into administration* and he can't influence the outcome from an independent administrator (unless he stumps up the cash he says he doesn't have and didn't before administration).

Wanting the UK gov to stump up money to save VS when he told them not to save BA
Wanting the gov to stump up money for VS when he didn't
Wanting the UK gov to use taxpayers money for VS when he moved to a tax free haven not to pay UK taxes

He was the "Master" in the British version of the Apprentice. Inconsistent statements goes with the territory.

 

[RAM]

A bit bemused by the public statements by RB in the last few days.

Wanting the gov to support with money VA when he didn't.
Wanting the gov to support VA when he previously said the UK gov under no circumstances should support BA when they were in trouble.
Telling the staff he was going to work to save VA only *after they went into administration* and he can't influence the outcome from an independent administrator (unless he stumps up the cash he says he doesn't have and didn't before administration).

Wanting the UK gov to stump up money to save VS when he told them not to save BA
Wanting the gov to stump up money for VS when he didn't
Wanting the UK gov to use taxpayers money for VS when he moved to a tax free haven not to pay UK taxes

Times change - what is happening now (and has been for some weeks) is that most countries have shut their borders to non-residents aka tourists, businesses have been shuttered so business travel is near non-existent. Back then it was a company specific issue and BA had been doing everything it possibly could to drive Virgin out of business.

RB's previous comments occured when it was business as usual and BA had been hiring private detectives to trail the Virgin limos from airports to people's homes to get their names & addresses and then BA tried to entice them to stop flying Virgin.

All this is public record.

This time around, the UK Govt has already provided over AUD 1 billion in loans to keep another UK based airline flying and RyanAir has started talking about needing support from, guess who?

BTW RyanAir is/was Europe's biggest airline and consistently ranks as in Top 5 for profitability. On world scale it is about the 5th largest airline.

 

[HS-TQE]

Breaking: Just reported via the radio that PER has apparently just done a "CBR" and has parked vehicles around a few VA/VARA aircraft to stop them from leaving.

Likely related to the ongoing VAH administration.

Edit: (Paywall Article now up) - Perth Airport blocks Virgin planes over debt claims

Edit 2: Statement from PER:

https://twitter.com/i/web/status/1253573660004118533

 

[travel_bug]

Breaking: Just reported via the radio that PER has apparently just done a "CBR" and has parked vehicles around a few VA/VARA aircraft to stop them from leaving.

Likely related to the ongoing VAH administration.

Edit: (Paywall Article now up) - Perth Airport blocks Virgin planes over debt claims

Edit 2: Statement from PER:

https://twitter.com/i/web/status/1253573660004118533

Ahh that brings me back to those “Somali Pirate” days

I guess that’s one way to make yourself a secured creditor - perhaps some of us with travel banks should attach ourselves to the planes Greenpeace style.

 

[33kft]

I had to chuckle at the first reply to that tweet, that PER should do the same to QF (who have been withholding payment to PER due to an ongoing dispute). I guess there's different rules depending on who still has cash in their wallet at the end of the day.

 

[Bagpuss]

I think we've been caught up on the wrong thing. Somone is flogging off the pancake makers from the lounges.

Someone's Flogging One Of Those Virgin Lounge Pancake Machines If Yr Bougie Ass Desires Treats

Already mourning the potential loss of the lounge? Here ya go.

www.pedestrian.tv

(Yes, it's a tongue-in-cheek website)

 

[Bagpuss]

Looks like Perth Airport are taking matters into their own hands.

Extraordinary twist in the collapse of Virgin Australia

Bulldozers are being used to block Virgin Australia planes from being removed from the tarmac at Perth Airport over claims the company owes a 'significant' amount of money.

www.dailymail.co.uk