Deloitte announced that the administrators have entered into a sale and implementation agreement with Bain through both its private equity and distressed and special situations funds.
The agreement will result in the sale and recapitalisation of Virgin Australia Holdings and its subsidiary Virgin Australia Group, which operates airlines Virgin Australia and Tiger.
Completion of the transaction will occur after the second meeting of creditors, which is currently scheduled to occur before the end of August.
This is indeed great news for the Australian travelling public and the Australian travel industry, which at the moment is still in turmoil due to the Covid-19 pandemic restrictions that the Australian government does not seem to be willing to start relaxing with the proper checks and balances.
The Australian traveling public can look forward to a competitive domestic airline environment which gives travellers greater choice, fair prices, and great service.
Bain Capital has received necessary regulatory approvals under the Australian government’s foreign investment laws to complete the transaction.
According to Deloitte, Bain’s bid supports Virgin’s current management team led by Paul Scurrah and their improvement plan for the airline. It also commits to the retention of thousands of jobs, carries forward all travel credits and Velocity Frequent Flyer booked flights, honours all employee entitlements, and provides a “significant injection of capital to see the business recapitalised and well-positioned for the future”.
The Virgin Australia Group entered administration on 21 April as a direct result of the Covid-19 unprecedented global pandemic which grounded its operations whilst during a major transformation of the business.
Right now, there is virtually no international travel and domestic air travel is severely curtailed and likely to be so for the foreseeable future. In this context, planning for an airline’s future is near impossible so well done Virgin Australia Group.