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Virgin Australia to be sold to Bain Capital

HS-TQE

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AFR Street Talk article today that bondholders have sidelined advisor Faraday, and the above proposal now dropped.

Suggestion that Broad Peak/Tor might go it alone with court action.
Broad Peak (Temasek) are getting just as bad as their "star child" SQ over the "Singapore to taek ovah VA !!!!!1111!!!!" debacle that's flooded the media annually over the past 8 years.

I wouldn't be suprised if Deloitte treated Temasek as a "tyre kicker" in the initial bid process.
 

jakeseven7

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Broad Peak (Temasek) are getting just as bad as their "star child" SQ over the "Singapore to taek ovah VA !!!!!1111!!!!" debacle that's flooded the media annually over the past 8 years.

I wouldn't be suprised if Deloitte treated Temasek as a "tyre kicker" in the initial bid process.
Maybe Temasek could buy Bain and then VA2 could join star alliance? 🤣
 

ja1

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Is anyone on this forum/thread in a position to go to / invited to go to / should be going to the next meeting (end of August?) and would report back here what was discussed (assuming there isn't a confidentiality flag).?

And to perhaps summarize what we know:

- Bain was the last remaining bidder (binding) and accepted as the preferred buyer for VA1 by the administrators
- This will be ratified (or not!) at the creditors meeting later this month - Deed of Company Arranagement (DOCA) vote
- They have announced a few certain things - e.g. approx 3000 staff being made redundant (about 6000 to stay)
- This is on top of a few hundred staff already made redundant or who have left
- Paul Scurrah will continue as CEO (anyone else in the exec team staying on ? CFO ? COO ? CIO ?)
- Bain said they wanted to keep the management team
- VA2 and VARA fleets stay as all 737 and some Fokkers - basically 777/A330/ATRs are all going
- Presumably some are owned rather than leased so that will raise cash for the airline
- (edit) - A320s in VARA are staying
- Flight routes to be rehashed and some dropped (regional NSW/QLD)
- Tigerair won't exist but the AOC is being retained
- (bookings converted to VA credit)
- Flights to Canberra to resume but not with ATR - so 737 only..
- VFF points redemption to continue with no current advice on value changing - for flights
- Lounges to reopen but only once there is sufficient demand/people flying
- Travel credits and bookings to be kept (and extended out to 2022 w/ flights to be taken by 2023
- Does anyone note those dates and think about how far out Bain/VA2 are thinking about how long this lasts..
- But also keeping this on the books also makes good sense as a bunch of people will still never redeem those credits and the longer you keep it, possibly the more people who don't redeem it (as they never pursue alternate ways to get a refund)


I'm not sure if there are 'facts' people disagree on.. and I'm not sure what else we can know to be fairly certain..
 
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RAM

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Maybe Temasek could buy Bain and then VA2 could join star alliance? 🤣
There is much mis-information still flying around about Temasek & Broad Peak etc.

Temasek invests in virtually any Singaporean start-up business as part of its mandate to 'grow Singapore'. It has not made a major investment (put much) in Broad Peak. Up thread (a fair way now) there are a number of VERY detailed posts about the $2 hedge funds one of which has a MUCH stronger connection to an Australia named Turnbull than to Temasek....

The media have been very biassed/skewed/disinterested in the facts vs PR being put out by those with an interest in VA not being around in the future. Have a look at posts from May to late June in this blog.
 
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jakeseven7

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There is much mis-information still flying around about Temasek & Broad Peak etc.

Temasek invests in virtually any Singaporean start-up business as part of its mandate to 'grow Singapore'. It has not made a major investment (put much) in Broad Peak. Up thread (a far way now) there are a number of VERY detailed posts about the $2 hedge funds one of which has a MUCH stronger connection to an Australia named Turnbull than to Temasek....

The media have been very biassed/skewed/disinterest in the facts vs PR being put out by those with an interest in VA not being around in the future. Have a look at posts from May to late June in this blog.
It was a joke.... yawn.... ;)
 
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HS-TQE

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VARA's A320s (leased from Scoot) alongside the F100s are staying for the time being under the VARA AOC.
IIRC, VARA's initial A320 (came from another company and was painted initially in the Skywest livery) is the only unit being returned (?)
 
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ja1

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I should note that the demise of Tiger under this deal leaves me personally sad for only one reason - the oldest female commercial pilot (Deborah Lawrie) was employed by and flying with Tiger. I don't know (and don't expect) that she'd be back under VA2 which would be the end of her professional career?

If anyone does know though it'd be really interesting to find out.

I thought her story/career was amazing.
 

muppet

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I should note that the demise of Tiger under this deal leaves me personally sad for only one reason - the oldest female commercial pilot (Deborah Lawrie) was employed by and flying with Tiger. I don't know (and don't expect) that she'd be back under VA2 which would be the end of her professional career?

If anyone does know though it'd be really interesting to find out.

I thought her story/career was amazing.
I believe the Tiger A320 pilots were made redundant before the company went into administration.
 

BNEFlyer

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VARA's A320s (leased from Scoot) alongside the F100s are staying for the time being under the VARA AOC.
IIRC, VARA's initial A320 (came from another company and was painted initially in the Skywest livery) is the only unit being returned (?)
Four of the five VARA A320's still in service went to VARA from Tiger AU (originally Tiger SG aircraft, never flew as Scoot). The other A320 is a former BA (and before that BMI) aircraft.
 

jakeseven7

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'No side deals': Jittery Bain blasts bondholders over rival Virgin plan

Virgin Australia's presumptive new owner Bain Capital has blasted two major bondholders for trying to disrupt the sale with their own rival proposal, saying it lacked credibility while claiming they approached Bain about a favourable side deal.

Debt investors Broad Peak and Tor are pushing to have their deal for Virgin, which would see unsecured creditors swap their debt for shares in the airline, put to a vote at Virgin’s second creditors' meeting in early September.

The Hong Kong and Singapore-based funds, which are owed about $300 million, say their deal will deliver 50¢ to 67¢ cents in the dollar for Virgin’s bondholders willing to contribute to a recapitalisation. Virgin's bondholders are owed $2 billion and fear they will receive as little as 10¢ in the dollar under a sale to Bain.

 

Melburnian1

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The two major [unsecured] bondholders have taken the matter to the Federal Court:

(from 'The Australian' website of mid afternoon, Tuesday 11 August 2020:


'...Singapore’s Broad Peak Investment Advisers and Hong Kong’s Tor Investment Management released details of their proposed deed of company arrangement (DOCA) on Friday which they said had been shared with the administrators Deloitte.

Under their proposal [unsecured] bondholders would be assured of a return on their investment of up to 67 cents in the dollar, and employees would receive a seat on the board.

Deloitte quickly responded by saying they could not consider the proposal due to the legally binding agreement entered into with Bain.

In a submission to the federal court, [unsecured] bondholders said any creditor should be able to submit a DOCA proposal to the administrators by August 24, details of which should be published in the report to creditors.

In addition, ballot papers being sent to creditors should give them the chance to vote on any rival DOCA’s to the Bain deal, the [unsecured] bondholders’ submission said.

Barrister Ian Jackman for Broad Peak and Tor told a court hearing on Tuesday afternoon it was “essential the ballot that was going to be made available to creditors electronically includes our DOCA”.

“There has to be uniformity in the ballot that goes out for this process to work,” Mr Jackman told the hearing before Judge John Middleton.

“Our proposal is that our rival DOCA must be a part of that ballot in such a way as to provide a fair opportunity for creditors to vote in favour of our DOCA.”

Judge Middleton said he would hear the matter on Monday...'

('Monday' is a reference to Monday 17 August 2020, I assume in Melbourne).
 

Melburnian1

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Activity is not unnaturally hotting up prior to the creditors' meeting (which isn't for about 3.5 weeks):

(from 'The Australian' online, PM 12 August 2020: this is only part):

'Two key bondholders seeking to derail the sale of Virgin Australia to Bain Capital claim to have won the backing of more than a dozen large financial institutions and aircraft lessors.

Documents filed in the Federal Court named 13 other institutions that had indicated their support for the development of an alternative proposal for the airline, including UBS, Credit Suisse, Morgans, Deutsche Bank and Mutual Limited.

At least 60 other bondholders were also in favour, and aircraft lessors who own 15 Boeing 737s used by Virgin Australia had contacted the bondholders to discuss their proposal.

The airline went into voluntary administration on April 21 with debts of $6.8bn, including $2bn owed to bondholders.

An affidavit from Singapore’s Broad Peak Investment Advisers and Hong Kong’s Tor Investment Management, was part of an application to the court seeking orders for their proposed deed of company arrangement (DOCA) to be voted on by creditors.

Their application also sought access to Virgin’s existing bankers, management and employee unions to gather more information about the airline’s arrangements...'

Further on, this is the nub of the bondholders' contentions:

'...However a spokesman for Broad Peak and Tor said their objective had always been to seek a fair recovery for the unsecured bondholders.

“We are sure bondholders and other creditors would welcome a serious, good faith discussion with Bain Capital to structure a solution that provides unsecured creditors the value that’s rightfully due to them and recognises the significant inherent value in the business as outlined in our proposal,” he said...'
 

Spongbob

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The VA Bond Holders made the investment knowing the bonds were unsecured, but were willing to take the risk because of the high annual yield.
VA was an uncertain investment in 2019 anyway, even for secured investments.
And now these VA Bond Holders want to have status akin to secured investors.
 

jakeseven7

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The VA Bond Holders made the investment knowing the bonds were unsecured, but were willing to take the risk because of the high annual yield.
VA was an uncertain investment in 2019 anyway, even for secured investments.
And now these VA Bond Holders want to have status akin to secured investors.
I'm not an astute investor but I would not have put my 5 cents spare change from my daily smoothie into VA last year!

It was pretty clear where VA1 were headed, well from my perspective.

I guess the allure of 8% (?) returns sucked some in....
 

HappyFlyerFamily

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I'm not an astute investor but I would not have put my 5 cents spare change from my daily smoothie into VA last year!

It was pretty clear where VA1 were headed, well from my perspective.

I guess the allure of 8% (?) returns sucked some in....
Well if you bought at the alleged 1c per unsecured bond, you would have got 10x from Bain, so 50c for you 😅
 

Melburnian1

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This story is from 'The Age'/'SMH' website of Thursday 13 August 2020.

It's new content as far as I see, serfty.

Apparently Virgin Blue co-founder Rob Sherrard is among those working with [unsecured] bondholders. (The other founder was Brett Godfrey).

This is an extract:

'...."We believe in the airline, firmly support the vision of management and are confident that Virgin can return to being a successful airline."

Virgin's administrators Deloitte has said the [unsecured] bondholders' plan cannot be considered because it has already signed a binding sale deed with Bain. Despite that, the [unsecured] bondholder are taking court action to try and force Deloitte to put their alternative proposal to a vote at its second creditors' meeting in September.

[Unsecured] Bondholders, which include around 30 major institutional investors and around 6000 retail investors, would swap their debts for shares in Virgin, which would remain listed on the ASX, and contribute to a $800 million capitalisation under the plan.

"We also want to be very clear that we don’t want to run the airline," Mr Sherrard said. "That is the job of the existing management team. We are focused on rebuilding our airline through a solid recapitalisation proposal."...'
 

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