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UPDATE 1-Virgin Australia has 19 potential buyers in data room -administrator

Published 12/05/2020, 10:49 am
Updated 12/05/2020, 10:54 am
VAH
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* Non-binding indicative offers are due on May 15

* Apollo, Oaktree, BGH, Indigo Partners interested -sources

* Airline has 117 leased planes and engines (Adds details of potential buyers, interim funding needs)

SYDNEY, May 12 (Reuters) - Virgin Australia Holdings Ltd's VAH.AX administrator said 19 parties interested in purchasing the airline had been granted access to a data room as of May 11 and non-binding indicative offers are due on May 15, according to an affidavit.

The airline entered voluntary administration last month, owing creditors nearly A$7 billion ($4.53 billion), and the administrators at Deloitte aim to agree a deal with a buyer by the end of June. 19 parties in the data room is up from eight that had signed confidentiality agreements to gain access to Virgin's books as of April 30.

Private equity and distressed situation specialists Apollo Global Management, Oaktree Capital Management and BGH Capital are among the firms that have expressed interest in the purchase, Reuters has reported, citing five sources.

U.S. based airline investor group Indigo Partners is also looking at a possible deal, three sources familiar with sales process had said on condition of confidentiality.

Virgin Australia has 117 leased planes and engines with monthly rentals of A$40 million, of which only 50 are operational due to the low demand brought on by the coronavirus pandemic, administrator Vaughan Strawbridge said in the affidavit published by the Federal Court of Australia on Tuesday.

He said the administrators were considering whether Virgin Australia would need interim funding to allow the business to keep operating until a second meeting of creditors, which they propose to hold in August.

The administrators are seeking permission to issue conditional credits to customers that had booked flights cancelled due to the pandemic that could be honoured by an acquirer, Strawbridge said.

"Potential buyers may be motivated to extend these conditional credits as part of any restructuring or recapitalisation of the Virgin Companies' business for the purposes of maintaining and enhancing the customer goodwill associated with the Virgin Companies," he said.

He added the airline is seeing a rise in credit card charge-backs from customers seeking refunds. That is a potential drain on cash it holds in accounts. ($1 = 1.5521 Australian dollars)

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Virgin Australia has 20 potential buyers, deal seen by June - administrators

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