Virgin Australia (VA, Brisbane International) is likely to maintain its base at Brisbane International, Queensland, after its two remaining bidders accepted an offer from the state government to keep it there, the Market Herald reported.
Bain Capital and Cyrus Capital both placed their final, binding offers for Virgin Australia Holdings to administrator Deloitte on June 22 and the successful bidder is expected to be announced by June 30. It is understood that 18 other bidders were cut out the race at various stages.
The Queensland government reportedly signed deals on June 21, brokered via the Queensland Investment Corporation (QIC), to ensure that Bain and Cyrus would not take the airline's headquarters out of the state.
In return, the QIC pledged to keep its position as a significant Virgin Australia investor, providing benefits worth AUD200 million Australian dollars (USD139 million) to help the airline as it recovers.
Meanwhile, Deloitte has asked Australia's federal government for an extension of its benefits scheme that helps companies retain employees, according to the Market Herald, even though Bain and Cyrus are allegedly planning a pared-back version of the airline.
Also on June 22, Virgin Australia Holdings bondholders have been working on an alternative backup plan to revive the airline if they are not satisfied with either of the offers, an anonymous source told Reuters.
The company entered voluntary administration on April 21, owing around AUD6.8 billion (USD4.7 billion) to creditors. AUD2 billion (USD1.39 billion) of this is owed to 6,500 unsecured bondholders, the second-most numerous group of creditors behind the employees, who will vote on a deal at a meeting in August.
The bondholders' backup plan reportedly involves a debt-to-equity swap to avoid liquidation if Deloitte's preferred offer is not acceptable, the source said, adding that the threat of a rival plan may also make the bidders and Deloitte more sympathetic to their interests.
