Prospective Virgin Australia Holdings buyer Bain Capital has pumped AUD125 million Australian dollars (USD87.5 million) in interim funding into the company to ensure its immediate survival, the Australian Financial Review reported citing minutes from a committee meeting earlier this month.

The minutes, which administrator Deloitte has filed with regulators, show that Virgin Australia (VA, Brisbane International) aims to increase capacity to 35% of its pre-covid levels by the end of August. The US private equity firm also plans to retain at least 73 aircraft from the airline's existing fleet.

Besides the initial cash injection, the document says that Bain is also ready to pay unsecured creditors "hundreds of millions of dollars" for their debt, though this appears to fall short of the nearly AUD2 billion (USD1.4 billion) Virgin owed them when it collapsed in April.

“Effecting the sale via a binding agreement provides certainty for the future of the airline and, again, avoids the threat of liquidation as critical interim funding has been provided by Bain Capital that ensures we are able to continue to trade the business to the completion of the transaction,” lead administrator Vaughan Strawbridge said.

Meanwhile, fearing they will see little in return for their debt, the airline's unsecured bondholders are still preparing to lodge their own separate bid for Virgin. This bid will first go to Strawbridge and his colleagues, who will decide whether to put it to Virgin's 12,000 creditors at a final meeting in mid-August together with Bain's offer.

The rebel bondholders lodged a draft of their debt restructuring deal with the administrators on July 20, the Australian Financial Review reported. Deloitte has already rejected an earlier proposal from the bondholders as too speculative.

“We have the funds and the ability to implement this proposal and firmly believe that our proposal represents the best option for Virgin Australia, its employees, creditors, stakeholders, and the Australian community,” said a spokesman for the group without detailing where the funding would come from. Deloitte acknowledged the arrival of the proposal and promised to considered it “in due course.”

In related news, Queensland's government has confirmed that Virgin Australia will remain based in Queensland with Bain as its owner. The government, through the Queensland Investment Corporation, has agreed with Bain to “own a strategic equity stake in the airline [that] will ensure Virgin’s headquarters remain in Brisbane International, retaining thousands of direct and indirect jobs,” according to Queensland Treasurer Cameron Dick.