SYDNEY/BANGKOK • Virgin Australia Holdings' administrators have shortlisted potential buyers BGH Capital, Bain Capital, Indigo Partners and Cyrus Capital Partners, a source with knowledge of the matter said yesterday.
The airline's administrators were expected to receive as many as eight non-binding indicative offers from potential buyers before a submission deadline last Friday.
Binding offers for the carrier, which is 10 per cent-owned by Singapore Airlines, are due on June 12. The company entered voluntary administration last month, owing creditors nearly A$7 billion (S$6.4 billion), making it the biggest Asia-Pacific casualty of the coronavirus crisis hitting the global aviation industry.
The strong interest in Virgin Australia at a time when the world aviation market is largely grounded shows the long-time attractiveness of the Australian domestic market, a duopoly between Qantas Airways and Virgin.
The administrators at Deloitte said in a statement that they had shortlisted a small number of well-funded parties with strong aviation credentials but declined to name them.
Bain, which owns Trans Maldivian Airways, is being advised on its Virgin offer by Ms Jayne Hrdlicka, the former head of Qantas budget airline Jetstar, according to media reports.
One of BGH's founders, Mr Ben Gray, led a failed takeover offer for Qantas in 2007 when he worked at private equity giant TPG.
Phoenix-based Indigo Partners' founder Bill Franke is the chairman of United States budget carrier Frontier Airlines, Chile's JetSmart and Hungarian Wizz Air.
Cyrus Capital was an investor in collapsed British regional carrier FlyBe, alongside Virgin Atlantic.
Bain and Indigo Partners declined to comment, while BGH and Cyrus Capital could not be reached immediately for comment.
The shortlisted bidders were first named by The Australian Financial Review.
Other parties that had put in non-binding indicative offers included Brookfield, India's InterGlobe Enterprises and Australian mining magnate Andrew Forrest, people with knowledge of the matter told Reuters.
Brookfield on Sunday told the administrators it would exit the process if more than two bidders were shortlisted because it would be unworkable given the tight timeframe, a source with knowledge of the matter said. Brookfield declined to comment.
The administrators said they understood some parties would be disappointed they were not shortlisted and hoped they would respect that the decision predicated on the business continuing and achieving the best outcome for all those impacted.
The shortlisted parties will receive more detailed financial and operational information, management workshops and meetings with as many of the financiers, landlords, suppliers, unions and other stakeholders of the business as possible before making final bids, the administrators said. They are aiming to agree on a deal with the winning party by the end of next month.
Meanwhile, Thai Airways International is a step closer to restructuring via a bankruptcy court after a key government panel backed the plan, which is due for consideration by the country's Cabinet today.
A committee that oversees policies for state-run enterprises agreed that the airline should seek such a rehabilitation, government spokesman Narumon Pinyosinwat told reporters in Bangkok yesterday.
Thai Airways, majority-owned by the Finance Ministry, has outstanding debt of about 92 billion baht (S$4.1 billion), of which approximately 78 per cent is owed to bond investors, according to data compiled by Bloomberg.
The flag carrier has posted annual losses almost every year since the start of 2013. It was under pressure to turn around its performance even before the Covid-19 outbreak.
REUTERS, BLOOMBERG
