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Thu 30 Apr 2020 11:31 AM

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Virgin Australia draws 20 suitors in race for sale by June

Virgin Australia collapsed owing $4.5 billion to more than 10,000 creditors, overwhelmed by a near-halt in revenue as the coronavirus shut down travel

Virgin Australia draws 20 suitors in race for sale by June

Image: Boeing

Virgin Australia Holdings Ltd. attracted at least 20 potential buyers as administrators race to sell the airline within two months.

Administrators at Deloitte want binding offers in June and are targeting a deal by the end of that month, according to a statement Thursday after the first meeting of creditors. Indicative bids are due mid-May.

Virgin Australia collapsed owing A$6.84 billion ($4.5 billion) to more than 10,000 creditors, overwhelmed by a near-halt in revenue as the coronavirus shut down travel. Deloitte wants a quick sale partly so the airline’s complex network of suppliers, contractors and plane lessors doesn’t unravel during the restructuring.

“We remain strongly focused on restructuring and refinancing the business, creating a viable operation that will appeal to prospective new owners, and bringing Virgin out of external administration as soon as possible,” administrator Vaughan Strawbridge said in the statement.

Eight parties have signed non-disclosure agreements and all of them have access to the airline’s financial information, Deloitte said. Negotiations continue with a further 12.

There’s a moratorium on coupon payments to Virgin Australia’s bondholders. Unsecured bondholders were owed about A$2 billion.

Morgan Stanley has been appointed to run the sale alongside Houlihan Lokey, Deloitte said.

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