Virgin Australia Financially Secure? [Now in Voluntary Administration]

[melb78]

Sorry to ask a simpleton’s question.
Can someone please give info on these shortlisted bidders and their likely proposal (ie full service, low cost, international/domestic)?

None has formally set out what there intentions are as yet they will meet wither the management and look closer at the book then they will outline what there ideas would be.

 

[HappyFlyerFamily]

None has formally set out what there intentions are as yet they will meet wither the management and look closer at the book then they will outline what there ideas would be.

Ok thanks.
With all the discussion about different versions of Virgin because so-and-so was a bidder I thought something more has been discussed.
Does anyone know the next stage?

 

[muppet]

Sorry to ask a simpleton’s question.
Can someone please give info on these shortlisted bidders and their likely proposal (ie full service, low cost, international/domestic)?

We need to wait for that detail to be leaked.

 

[jakeseven7]

Virgin sale: Bain Capital could pair up with Richard Branson’s Virgin Group

I feel sorry for the VA1 staff who believed Bransons complete BS he has fed them since the start of this sorry mess:

'I love you all but not enough to give any more money, because I don't have any, oh wait yes I do I have tonnes, just wanted you all to go under first, now I'm back and love you again'

 

[get me outta here]

The list was stated on the 2pm ABC News. A bunch of finance companies. Shortlist of four suitors in the running to take over Virgin Australia - ABC News

We need to wait for that detail to be leaked.

 

[jakeseven7]

That or they wanted to pick up the operation for a pittance and now seeing there’s competition driving the price up, have decided to just white-ant the whole process.

Exactly - they are orchestrating a liquidation scenario....

 

[antycbr]

Exactly - they are orchestrating a liquidation scenario....

What we have is the news media desperate to fill column inches which means they’re taking to anyone and everyone and speculating. Much as we are here. There’s a process and the Administrators are working through it.

I don’t think liquidation would be an outcome the Government would be happy with.

 

[TheInsider]

I don’t think liquidation would be an outcome the Government would be happy with.

The government really has no say it in.

 

[BAM1748]

I feel sorry for the VA1 staff who believed Bransons complete BS he has fed them since the start of this sorry mess:

'I love you all but not enough to give any more money, because I don't have any, oh wait yes I do I have tonnes, just wanted you all to go under first, now I'm back and love you again'

He is only the minor shareholder, I certainly haven't seen the larger shareholders offering to help out the employees.

 

[RooFlyer]

Can someone please give info on these shortlisted bidders and their likely proposal (ie full service, low cost, international/domestic)?

With all the discussion about different versions of Virgin because so-and-so was a bidder I thought something more has been discussed.
Does anyone know the next stage?

The first stage was 'indicative non-binding' bids. The amount of company data at their disposal would have been limited to some extent, so I expect that no firm operational scenarios were presented - just 'if its like this, then we'll do this'. The Administrator would have been seeking a shopping list of things each bidder had to answer:

* financial capability
* likely mix of cash vs other instruments in firm bid
* likely conditions placed on any firm bid
* likely third party approvals needed for a binding bid
* what proposals for the staff
* Will FIRB approval be required
* Airline operating experience
* CVs of proposed board/any new management

... and the like. First stage weeds out the tyre kickers, who don't get to see the good stuff.

Stage two now, and maybe with the four, maybe that will be weeded down to just 2 or 3 after some more discussions, get to see the complete data room to place binding bids. And this is where the bidders say "Oh, no, its worse than we thought, our indicative offers will have to be cut a lot ", or something like that.

 

[p--and--t]

He is only the minor shareholder, I certainly haven't seen the larger shareholders offering to help out the employees.

Maybe Branson's interest is not so altruistic and he is more worried about Virgin brand damage (which is pretty much going to be tatters given what else is happening across the world).

Whereas the others have resiled themselves to writing off the losses and not worried about the current situation in any way effecting their individual brands.

 

[antycbr]

The government really has no say it in.

If the government thinks the process is being gamed they’ll get involved - that’s what Nick Moore is there for.
Liquidation is not a good outcome politically and also transfers employee entitlement costs to the Government too.

 

[jakeseven7]

Administrators on the back foot, have been forced to confirm they only have enough cash to keep VA1 alive until end of June. If a sale is not completed by then, VA1 may be liquidated.

From that point on, whatever VA2 model emerges will need a massive cash injection from its new owner(s) immediately.

--------

Only enough cash to get through the sale process at Virgin: Deloitte

Deloitte has admitted Virgin Australia only has enough cash on hand to "get through our sale process", which is scheduled to complete at the end of June, as concerns grow over the struggling airline's immediate liquidity.

Virgin Australia went into administration in April as the coronavirus crippled the aviation sector.

The big-four firm has also defended its processes at Virgin after Canada's Brookfield Asset Management – which failed to make a shortlist of serious bidders for Virgin on Monday – appeared to withdraw from the sale with concerns about the tight timeline.

Brookfield believes there are too many interested parties in the contest for detailed and complete negotiations with stakeholders to take place before a June 12 deadline on binding offers.

It also shares anxieties with other bidders over Virgin's ability to remain solvent to the second creditors' meeting in late August with just over $100 million in the bank.

Virgin only has enough cash to get through sale process

"We've been considering what the options are for potential additional funding should it be required and when would be the appropriate time," said Deloitte's lead administrator.

www.afr.com

 

[jakeseven7]

None has formally set out what there intentions are as yet they will meet wither the management and look closer at the book then they will outline what there ideas would be.

Indigo's operations are all ultra LCC so I think thats pretty obvious that is where they might be headed and Bain has been quoted on the below which sounds like a move down market, but not to ultra LCC land:

Bain's vision for the airline includes simplicity with a focus on leisure travel, small-to-medium enterprise and price-sensitive corporate travel segments.

 

[dajop]

Bain's vision for the airline includes simplicity with a focus on leisure travel, small-to-medium enterprise and price-sensitive corporate travel segments.

That sounds similar to what Brett Godfrey was doing with DJ, particularly during the Patrick/Toll years, well before the rebranding to VA.

 

[TheInsider]

That sounds similar to what Brett Godfrey was doing with DJ, particularly during the Patrick/Toll years, well before the rebranding to VA.

And the circle continues!

 

[BNEFlyer]

Nothing has been mentioned about the % these reported interested parties are bidding for. Could it be possible they may take a majority stake but an existing investor might still be part of the pie?

 

[RooFlyer]

Nothing has been mentioned about the % these reported interested parties are bidding for. Could it be possible they may take a majority stake but an existing investor might still be part of the pie?

No, its all or nothing. Everyone's shares rank equally (as far as I know for VA) , and shareholders are at the end of the queue.

 

[TheInsider]

Nothing has been mentioned about the % these reported interested parties are bidding for. Could it be possible they may take a majority stake but an existing investor might still be part of the pie?

The company is 100% up for grabs. If one of these 4 companies decide to let another investor in, I'm sure they could. But as it stands, no more SQ, EY, Chinese carriers and I think minimal chance of Dick Branson having any control again.

 

[antycbr]

The company is 100% up for grabs. If one of these 4 companies decide to let another investor in, I'm sure they could. But as it stands, no more SQ, EY, Chinese carriers and I think minimal chance of Dick Branson having any control again.

Yes all new shareholders. Will depend if Branson can get together some cash to preserve his name on the operation moving forward - he will most likely need to put in some equity to gain the revenue stream of licensing fees. It will also be a test of his brand reputation.

SQ would be maintaining a watching brief as they would know exactly how many passengers on their services book VA codeshares or put Velocity FF numbers into SQ bookings. I think they'd be keen to keep an alliance but not involving an equity stake - just like DL do.

From SQ's perspective the road warrior going SYD-MEL regularly would like to have benefits (either status or earn/burn) to fly SQ - otherwise they may well jump to QF and are more likely to stay on QF metal for that longhaul flight to Europe (in a few years time when such things are again possible).

If there's no VA there'll be no way that SQ can get any form of partnership with QF long term for competition reasons, only limited domestic carraige to non-served ports like NZ have.