Andrew Forrest joins 20 bidders circling Virgin Australia
Mining magnate Andrew “Twiggy” Forrest has emerged as a possible bidder for Virgin Australia, as administrators of the collapsed airline say 20 potential buyers are vying to keep the carrier alive.
Deloitte partner Vaughan Strawbridge told a first meeting of Virgin’s creditors on Thursday that initial offers for the airline would be due in just over a fortnight. However, the firm will seek to delay a second meeting of creditors – where they can vote on any takeover deal – by up to three months.
Sources confirmed that billionaire miner Mr Forrest, who controls Australia’s third-largest miner Fortescue Metals, has spoken to investment bankers about a potential tilt for Virgin. Other heavy hitters weighing up a bid are BGH Capital (backed by AustralianSuper), Canadian asset manager Brookfield, American airline investor Indigo Partners, American distressed debt specialists Oaktree.
Mr Forrest’s interest was first reported by The Australian Financial Review.
Deloitte said on Thursday eight bidders had signed non-disclosure agreements and now have access to Virgin’s dataroom, and it was negotiating with a further 12.
Virgin’s creditors, who are together owed almost $7 billion and include banks, bondholders, aircraft lessors and workers, were told at the meeting that potential buyers needed to submit non-binding indicative offers by May 15, with binding offers by June. “We remain confident that our target of achieving a sale by the end of June is achievable,” Deloitte’s Mr Strawbridge said after the meeting.
Suitors will be given access to a management plan for the relaunched airline – or “Virgin v2.0” – next Tuesday, according to slides from the meeting seen by The Sydney Morning Herald and The Age. Virgin chief executive Paul Scurrah and his management team are working with Deloitte on restructuring plans.
Administrators from Deloitte also told creditors it intended to make a court application to delay the second creditors’ meeting, due on or before May 22, by up to three months. The second meeting is where creditors vote on what should happen to the company, including being relaunched with new owners or wound up.
The extension was needed so Deloitte could “deal with potential purchasers of the business and/or provide us with time required to enter discussions with key stakeholders to restructure” the airline, the firm said. The delay also took into account the size of Virgin’s business and the necessary restructure.
Meanwhile, bondholders in the United States and Australia have recruited Faraday Associates, led by distressed debt specialist Lachlan Edwards and former Ferrier Hodgson stalwart John Nestel, to represent their interests along with law firm Corrs Chambers Westgarth. The group is believed to represent 50 per cent of all bondholders.
A proposed creditors’ committee of inspection includes aircraft lessor AerCap, bondholders Sargon Capital, major Australian airports, and unions representing pilots, cabin crew, ground crew and office staff.
Business reporter at The Age and Sydney Morning Herald.
Sarah Danckert is a business reporter.
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