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Virgin Australia to be sold to Bain Capital

jakeseven7

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The successful bidder will need to get the majority of creditor votes, both in terms of number as well as by value. The 9,000 strong staff of Virgin hold the majority in the former, while bondholders, mostly secured, have the majority in the latter.
Can Bain fire the media quoted likely to go '4000' employees before the creditors meeting? I would hope not!?
 

RAM

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Can Bain fire the media quoted likely to go '4000' employees before the creditors meeting? I would hope not!?
Remember who get to vote on the proposal.....

Ever get the feeling that the anti-VA alliance are wearing their typing fingers & phone fingers out spreading all these 'off-the-record' stories that all appear to have one goal?

The pips sure are squeaking....

I wonder who stand to profit the most if (WILL NOT HAPPEN) the Bain bid falls over? Sure isn't the VA staff nor creditors....

Wonder how the investigation into AJ's comments is going? Been very silent on that front for something that is soon going to be 3 months on....

Could any of those 'investigators' be Chairman's Lounge members? Some are guaranteed to be but that would not cause any conflicts of interest. A bit like the ex-Gas company CEO being deputy chair on the Fed Govt Energy Committee for the future.
 

Melburnian1

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Unsecured.
Also put in their bid after the deadline.
'The Australian' also has a lengthy article re the bondholders.

'The Oz' article is paywalled but here's an excerpt:

'Virgin Australia’s $2bn unsecured bond holders have stepped up the pressure on administrator Vaughan Strawbridge of Deloitte to increase their payout, with a surprise move to appeal to the Takeovers Panel to challenge his deal to sell the airline to Bain.

... <redacted copywrite content>
 
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Melburnian1

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The near cessation of flights between MEL and SYD (probably from Wednesday 8 July) will further reduce opportunities for Bain Capital to increase VAd flights.

By air, rail, road or any other means, Victoria is (or will be in the case of NSW) cut off from almost anywhere else (unless one is a deemed essential worker or is given a waiver on compassionate grounds. The latter process is apparently not instant).
 
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kamchatsky

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This is not going to help VA at all. SYD-MEL is the most travelled route and now that is being just about cut off again, it meant the recovery would be much slower than expected. Even though I literally have 2 VA points, I hope VA does not go to liquidation as I had great experience with them when I was flying with them regularly for work in the past.
 

HS-TQE

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A Singaporean firm partly owned by Temasek Pte Ltd in partnership with the VA bondholders has their fingers in the pie again, it's the continuation of the story of the VA Bondholders trying to "pull down" the Bain deal at the last minute.

You can also add that to Chapter 3214325234324332432 of the long running "Singapore to taek ovah VA !!!!!1111!!!!" 'vaporware' debacle.

Edit: And by Singapore, I meant any Singapore firm related to (or owned by) Temasek Pte Ltd in general. Rather than Singapore Airlines directly (A company majority owned by Temasek Pte Ltd).

 

jakeseven7

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Don’t these bond holders know if they tank the Bain deal it is all over red rover for VA1?

I bet Bain are looking at the internal border closures now, breaking a sweat and wondering what they have got themselves into...

Remember their model is making money off the trunk routes and leaving the smaller thinner routes to QF/QFLink/Rex and the biggest trunk route has just evaporated right infront of them....
 

RAM

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Maybe that’s what they want.
They just want more of their money back and if it takes VA going into liquidationfor that to happen they would see that as a win unfortunately
If VA was to go to liquidation (WILL NOT HAPPEN) then unsecured debt holders get 0 cents in the dollar. After their costs of funding Faraday & co team, etc etc - they end up losing more than the original debt provided - but the 'helpers' at least got a positive return.

What the media have NOT covered in the slightest is the legal ramifications of 'unsecured' lending. No security means if anything goes seriously wrong you get nothing back if all secured lenders, employees & the ATO have not been fully paid out already.

Given the 30%+ falls in 'in-demand' airframe valuations since 31 Dec 2019 - even the previously over-collateralised lenders will not receive back what they lent/provided. Instead they'll get a plane that they lent say $80 on against a valuation of $100 (say) that is now valued at $67 with virtually seller no buyer & holding costs (parking & required period maintenance).

Any advisor worth having knows this but as the saying goes about a drowning man....

Of course it won't stop the competitors to VA encouraging as much negative publicity/uncertainty/consumer scaring articles/rumours being spread in an attempt to drive away potential future lenders & future customers.

Never get between consultants and a fist full of dollars.

Caveat Emptor except for unsecured bondholders it seems.
 

eastwest101

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I think the unsecured bondholders approach to the take overs panel is pretty interesting, if they can mount a legal argument that brings out a declaration of unacceptable circumstances then they can use the takeovers panel to derail the entire administrators appointment and the actions of Deloite.

Plan B is that the takeovers panel gives them a legal door ajar to gatecrash the second creditors meeting and ambush Bain with a better superior offer, possibly by doing a deal with a few large employee representatives to get their gatecrash offer over the line.

Plan C is that if things descend into a protracted legal battle then Deloitte may push the liquidation button and then it's a new game of buying assets off the liquidators in a distressed disorderly sale.

The ideal winner wants union votes, affiliated super funds money, ASX listing to counteract and tendency of governments to protect Qantas, all the debt gone, access to a low taxation transfer pricing jurisdiction like Singapore, a partnership with a protected species regional airline that won't be allowed to go broke, access to state govt sweetness and access to jobkeeper to warehouse staff at the taxpayers expense and access to industry assistance, and they will need to have a way of waking up the slumbering regulator that is the ACCC to make life as difficult as possible for Alan Joyce.
 

drron

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I can't see the appeal to FIRB getting up.FIRB should take the national interest into account and hobbling VA2 is not in the national interest.
But it does generate more money for the advisors legal teams.
 

jakeseven7

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Bain starting to get twitchy if they can't get Fed's to confirm? I would think something more must be coming for all airlines. If the states keep shutting borders then neither VA2 or QF will survive long.

----------------------

 

jakeseven7

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Court documents challenge 'watertight' Virgin sale to Bain


Virgin Australia’s administrator Deloitte has cast doubt on whether its sale of the airline to Bain Capital is as watertight as originally presented, with court documents revealing the transaction is conditional and could still be terminated.

Deloitte said when announcing the sale to Bain that the binding agreement secured Virgin’s future, created certainty for workers and creditors, and was subject only to “minimal conditions” such as regulatory approvals.

But documents filed in the Federal Court reveal the sale is still conditional and far from certain, with a “significant number of steps” and conditions before the transaction can be completed.

 

eastwest101

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Court documents challenge 'watertight' Virgin sale to Bain


Virgin Australia’s administrator Deloitte has cast doubt on whether its sale of the airline to Bain Capital is as watertight as originally presented, with court documents revealing the transaction is conditional and could still be terminated.

Deloitte said when announcing the sale to Bain that the binding agreement secured Virgin’s future, created certainty for workers and creditors, and was subject only to “minimal conditions” such as regulatory approvals.

But documents filed in the Federal Court reveal the sale is still conditional and far from certain, with a “significant number of steps” and conditions before the transaction can be completed.


Don't forget that the unsecured-bondholders also have the Takeovers Panel action up their sleeve, the FIRB my look at the broad national interest, but if the Takeovers Panel can be convinced that there is a possibility of some sort of 'secret' or 'confidential' deal then the panel might be inclined to act. The Takeovers panel has been described by some people as not liking 'confidential' or 'secret' deals but the other bonus is that the Takeovers Panel interim orders could blow up the timeframes or other conditions that Bain and/or Deloitte have ticking in the background that might have an expiry date. i.e. external finance

Whether its through the Federal Court action or the Takeovers Panel delays, it looks like the unsecured bondholders and their partners are on a bit of an epic fishing expedition, to get a complete look at the entire Bain offer, obviously Bain and Deloitte don't want too much transparency because they can still see a last minute "gatecrashing" superior offer from the parties related to the unsecured bondholders during the second creditors meeting.

To gatecrash successfully they need to know exactly what dollar value and what conditions Bain are offering so that they can trump Bain with a higher less conditional bid, hence the fishing expedition. Even if their gatecrashing attempt at the second creditors meeting fails, then this current action now sets them up for other legal challenges and greenmailing attempts to extract some money out of Deloitte. I hope the Deloitte administrators all paid their proffesional indemnity insurance and are up to date with that. 😀
 

jakeseven7

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Don't forget that the unsecured-bondholders also have the Takeovers Panel action up their sleeve, the FIRB my look at the broad national interest, but if the Takeovers Panel can be convinced that there is a possibility of some sort of 'secret' or 'confidential' deal then the panel might be inclined to act. The Takeovers panel has been described by some people as not liking 'confidential' or 'secret' deals but the other bonus is that the Takeovers Panel interim orders could blow up the timeframes or other conditions that Bain and/or Deloitte have ticking in the background that might have an expiry date. i.e. external finance

Whether its through the Federal Court action or the Takeovers Panel delays, it looks like the unsecured bondholders and their partners are on a bit of an epic fishing expedition, to get a complete look at the entire Bain offer, obviously Bain and Deloitte don't want too much transparency because they can still see a last minute "gatecrashing" superior offer from the parties related to the unsecured bondholders during the second creditors meeting.

To gatecrash successfully they need to know exactly what dollar value and what conditions Bain are offering so that they can trump Bain with a higher less conditional bid, hence the fishing expedition. Even if their gatecrashing attempt at the second creditors meeting fails, then this current action now sets them up for other legal challenges and greenmailing attempts to extract some money out of Deloitte. I hope the Deloitte administrators all paid their proffesional indemnity insurance and are up to date with that. 😀
Is this just bluster from the bond holders to squeeze VA2/Bain for cash?

Or do they actually have a chance of toppling the offer and sending VA1 into liquidation?

I'm not a financial expert but it reads that they don't have much hope of being successful?
 

RooFlyer

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Virgin Australia’s administrator Deloitte has cast doubt on whether its sale of the airline to Bain Capital is as watertight as originally presented, with court documents revealing the transaction is conditional and could still be terminated.

Deloitte said when announcing the sale to Bain that the binding agreement secured Virgin’s future, created certainty for workers and creditors, and was subject only to “minimal conditions” such as regulatory approvals.
... writes a journo. Nothing at all in that surprises me - just as Deloitte's assurances weren't to be taken at face value. Of course there are all sorts of conditions and 'outs' for the purchasers.

Don't forget that the unsecured-bondholders also have the Takeovers Panel action up their sleeve, the FIRB my look at the broad national interest, but if the Takeovers Panel can be convinced that there is a possibility of some sort of 'secret' or 'confidential' deal then the panel might be inclined to act. The Takeovers panel has been described by some people as not liking 'confidential' or 'secret' deals
Having dealt with FIRB a few times, albeit some time ago, I can't see how they have a leg to stand on in intervening. The airline was previously foreign owned & controlled and it will continue to be - a few times recently the FIRB have ruled such when declining to intervene.

The Bain/Administrator deal is an off-market transaction and doesn't need to be made public, unlike most if not all the deals the Takeover Panel looks at IIRC. I wouldn't even describe the deal as a 'takeover'. the shareholders themselves took themselves 'out' by appointing an administrator. The transaction is officially a Deed of Company Arrangement - not a 'takeover' under the Corps Law, as far as I remember it, although as it will result in a 'change of control' event, that may be enough.
 
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aaronm

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Having dealt with FIRB a few times, albeit some time ago, I can't see how they have a leg to stand on in intervening. The airline was previously foreign owned & controlled and it will continue to be - a few times recently the FIRB have ruled such when declining to intervene.
Going from being 50% or so owned by Chinese firms to 100% owned by a US firm is arguably in the national interest at the present time anyway.
 

jakeseven7

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Going from being 50% or so owned by Chinese firms to 100% owned by a US firm is arguably in the national interest at the present time anyway.
Yes, Americans are wonderful global citizens, no one in the world we would rather be associated with.
But hey beggars can't be choosers.
 

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