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Virgin Australia to be sold to US private equity firm

Business

UPDATED | Bain Capital has emerged as the winning bidder for Virgin Australia, with the administrators agreeing to sell the ailing airline to the Boston-based private equity firm.

 

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The sale and implementation deed is subject to minimal conditions and should be completed before the end of August, the Deloitte administration team said on Friday.

Deloitte said it does not expect any return to shareholders, and at this stage it isn’t possible to estimate the return to Virgin’s creditors, who are owed around $7 billion.

“Bain Capital has presented a strong and compelling bid for the business that will secure the future of Australia’s second airline, thousands of employees and their families and ensure Australia continues to enjoy the benefits of a competitive aviation sector,” Virgin administrator Vaughan Strawbridge said.

Deloitte said the transaction will also carry forward all Velocity frequent flyer-booked flights, honours all employee entitlements, and supports the current management team led by Paul Scurrah and their improvement plan for the airline.

A separate statement issued by Bain quoted Virgin Australia chief executive Paul Scurrah saying that its proposal “offers the best possible future for Virgin Australia, its employees and its customers”.

Scurrah said he had worked closely with the Bain team during the bidding process and it had demonstrated a deep understanding of aviation and our culture.

“We are aligned in our vision for Virgin 2.0 and look forward to working with them to secure the airline’s future.”

Australian Council of Trade Unions president Michele O’Neil said she understood the agreement provided 100 per cent protection for employee entitlements but would result in some job losses.

Mike Murphy, an Australian-based managing director of Bain Capital, said Bain’s plan for Virgin would see it return to its core strengths.

He said Bain appreciated how difficult the current situation had been for Virgin staff.

– AAP

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