* Had requested A$1.4 bln loan from Australian govt
* Shares tightly controlled by foreign airlines
* Airline has grounded almost all flights (Adds details on options, Singapore Airlines position)
By Jamie Freed
SYDNEY, April 14 (Reuters) - Cash-strapped Virgin Australia Holdings Ltd VAH.AX entered a trading halt on Tuesday, citing ongoing discussions involving financial assistance and restructuring alternatives to help it weather the coronavirus crisis.
The airline, which had requested A$1.4 billion ($895 million) of loans from the Australian government, said the trading halt on its shares and unsecured notes would remain in place either until an announcement by the company or two trading days, whichever was earlier. remains in talks with the government about various aid options and has hired investment bank Houlihan Lokey to advise it on a potential debt restructuring, said a person with knowledge of the matter who was not authorised to speak with media.
Virgin and Houlihan Lokey did not respond immediately to a request for comment. The Australian newspaper first reported Houlihan Lokey's involvement.
Virgin's shares are tightly controlled by a group of foreign airlines including Singapore Airlines Ltd SIAL.SI , Etihad Airways and Chinese conglomerate HNA Group that have also seen a sharp deterioration in revenue due to the coronavirus pandemic.
Fitch Ratings last month downgraded its long-term rating on Virgin to B- on rating watch negative from B+, which included removing a one-notch uplift it had previously received based on the expectation it would receive financial support from its shareholders, particularly Singapore Airlines.
The Singaporean carrier is focused on its own financial health rather than rescuing Virgin, with which it could maintain a commercial partnership even if its equity stake was diluted, a person familiar with the matter told Reuters on condition of anonymity.
In a statement, Singapore Airlines declined to comment directly on whether it would provide aid for its partner, but said a strong aviation sector in Australia and globally would be key to support the recovery of trade, tourism and investment and Virgin would be central to ensuring that was possible.
Etihad and HNA declined to comment on whether they were willing to provide funding to Virgin.
Virgin last week grounded all domestic flights, except a single daily Sydney-Melbourne service through June 15.
The airline had already cut all international flights except government rescue charters, put most of its workforce on leave and permanently cut all pilots at low-cost arm Tigerair Australia and all crew based in New Zealand.
Virgin competes in the Australian domestic market against larger rival Qantas Airways Ltd QAN.AX , which has a stronger balance sheet. ($1 = 1.5640 Australian dollars)