Bondholders in Virgin Australia Holdings (Virgin Australia) have made an application to the Takeover Panel seeking approval to submit an alternative purchase proposal to creditors to consider against the currently accepted offer from private equity group Bain Capital for an as-yet undisclosed sum.
Bondholders are not the only ones to object to what they see as unacceptable sales processes carried out by the administrators, Deloitte, which had precluded them from submitting their own proposal. According to Reuters news agency, Singapore’s Broad Peak Investment Advisers and Hong Kong’s Tor Investment Management are also seeking interim orders allowing them to access information including the terms of the Bain transaction.
Deloitte selected Bain over a bid from private equity group Cyrus Capital Partners and a debt-to-equity swap proposed by the group of unsecured bondholders owed A$2 billion (US$1.39 billion), indicating the principal driving factor to accepting the offer from Bain was based on their ability to provide immediate interim financial help to the struggling carrier.
Virgin Australia had insufficient funds to continue to operate up until the time of the planned August meeting when shareholders will vote on the proposed Bain offer. The Takeovers Panel has not commented on whether or not it will act on the application of the bondholders.
