- Virgin Australia’s (VAH) proposed buyer, Bain Capital, has pushed back at two major bondholders who are trying to sink the airline’s sale
- Tor Investment Management and Broad Peak Investment Advisers claim they were slighted by multinational accountant Deloitte’s handling of the deal
- Now, with a creditors’ meeting scheduled for September, the aggrieved bondholders are drafting an alternative deal
- They’re hoping creditors will swing towards an opportunity to exchange their debt for Virgin shares
- So far, however, Deloitte has shown no interest in Tor and Broad Peak’s plan, while Bain has hit back at the debt investors, claiming the proposal “is not credible, nor capable of progressing”
- Now, Tor and Broad Peak have made requests to see unreleased information surrounding Bain Capital’s bid for Virgin, including the unspecified sale value
- When Virgin went under April, administrators uncovered $7 billion in outstanding debt
- Company shares last traded for 8.6 cents each in mid-April
Virgin Australia’s (VAH) proposed buyer, Bain Capital, has pushed back at two major bondholders who are trying to sink the airline’s sale.
Tor Investment Management and Broad Peak Investment Advisers claim they were slighted by multinational accountant Deloitte’s handling of the Virgin sale.
Tor is a Hong Kong-based firm, while Broad Peak is financially backed by major Singaporean firm, Temasek.
Now, both bondholders have lodged their attempted derailment through the Australian Takeovers Panel (ATP).
The two firms are part of a group to which nearly $2 billion in Virgin Australia debt is owed.
All up, $7 billion in debt, combined with the COVID-19 pandemic, is what crippled the airline and brought it into administration this year.
Now, Tor and Broad Peak have made requests to see unreleased information surrounding Bain Capital’s bid for Virgin, including the unspecified sale value. And, with a creditors’ meeting scheduled for September, the aggrieved bondholders are drafting an alternative deal. They’re hoping creditors will swing towards an opportunity to exchange their debt for Virgin shares.
The plan is still in early stages however, according to the ATP.
“A sitting panel has not been appointed at this stage and no decision has been made whether to conduct proceedings,” the panel said on Tuesday. “The panel makes no comment on the merits of the application”.
So far, however, Deloitte has shown no interest in Tor and Broad Peak’s plan, while Bain has hit back at the debt investors, claiming the proposal “is not credible, nor capable of progressing,”
Indeed, Bain Capital referred to the derailment plan as “noise” and “interference” on Tuesday.
“[Broad Peak and Tor] recently approached Bain Capital,” The private investment firm said in a statement. “It wouldn’t take much to imagine what they are seeking. Bain Capital has rejected the proposal. Bain Capital believes that similarly situated creditors should be treated equally and that there should be no side deals”.
Virgin administrator Deloitte also quelled any rumours.
“While it is open to any party to submit an alternative proposal, it cannot be considered by the administrators, or recommended to creditors, given the binding agreement already in place,” Deloitte said.
Company shares last traded for 8.6 cents each in mid-April.