Cyrus and Bain make final cut for Virgin Australia shortlist

Cyrus and Bain make final cut for Virgin Australia shortlist

Administrators handling the sale of paralysed airline Virgin Australia (ASX: VAH) have narrowed the shortlist down to two bidders, selecting Bain Capital and Richard Branson-linked investment advisory Cyrus Capital Partners for the process.

The decision means BGH Capital and Indigo Partners have been left on the tarmac.

Cyrus was one of the original backers of Virgin America, while the Sydney Morning Herald reports Bain has drawn concerns from the Transport Workers Union - which holds key votes in the administration process - given its track record with mass firings of workers at Toys R Us in 2017.

Last month Bain Capital completed a majority in Japanese airplane manufacturer Showa Aircraft Industry for around ¥90 billion (AUD$1.23 billion). The Australian previously reported the Boston-based group may link up with Branson if it made the final cut. 

Over the weekend and the past two days, Deloitte administrators John Greig, Sal Algeri, Richard Hughes and Vaughan Strawbridge assessed five non-binding indicative proposals received on Friday. The fifth party was Canadian asset management group Brookfield. 

Strawbridge says the next stage in this sale process begins today.

"Over the weekend through to today, we assessed the proposals received from shortlisted bidders and discussed their proposals with them to ensure a thorough and comprehensive assessment has been undertaken," he says.

"Both Bain Capital and Cyrus Capital Partners are well-funded, have deep aviation experience, and they see real value in the business and its future.

"We would like to thank all interested parties for the strong interest they have displayed in the business and their commitment to the process over recent weeks."

He says administrators will now spend the coming weeks facilitating in-depth bidder engagement with the stakeholders of the business, working closely with both preferred bidders in the lead-up to binding final offers being received.

"The strong interest coming from all parties has generated the competitive tension we have sought that is important in a process such as this, and we are in a strong place when it comes to delivering the best possible commercial outcome for all creditors, and to see a strong and sustainable Virgin Australia emerge from this process. It is still the intention to have a binding agreement in place by 30 June, which remains unchanged," he says.

"There will also be speculation that entities associated with the parties that have not moved into this next phase, as well as others, could become involved in some capacity with the remaining parties. That will, of course, be a matter for them."

Updated at 4:41pm AEST on 2 June 2020.

Enjoyed this article?

Don't miss out on the knowledge and insights to be gained from our daily news and features.

Subscribe today to unlock unlimited access to in-depth business coverage, expert analysis, and exclusive content across all devices.

Support independent journalism and stay informed with stories that matter to you.

Subscribe now and get 50% off your first year!

Four time-saving tips for automating your investment portfolio
Partner Content
In today's fast-paced investment landscape, time is a valuable commodity. Fortunately, w...
Etoro
Advertisement

Related Stories

Sleeping Duck founders win court case against angel investor Adir Shiffman

Sleeping Duck founders win court case against angel investor Adir Shiffman

Dr Adir Shiffman, an angel investor who helped turn around the fort...

Former AFL boss Gillon McLachlan to lead Tabcorp as new CEO

Former AFL boss Gillon McLachlan to lead Tabcorp as new CEO

After speculation was quashed that he would be joining Racing Victo...

Luxury fashion seller Azura hits profitability as AI plugs data gaps

Luxury fashion seller Azura hits profitability as AI plugs data gaps

An artificial intelligence (AI) overhaul has allowed Azura Fashion ...

“Not our desired outcome”: Telix withdraws from $300m Nasdaq IPO

“Not our desired outcome”: Telix withdraws from $300m Nasdaq IPO

Telix Pharmaceuticals (ASX: TLX), one of the nation’s largest...