VIRGIN COURT BAT­TLE OVER ‘SU­PE­RIOR’ BID

Geelong Advertiser - - BUSINESS - GLEN NOR­RIS

DIS­GRUN­TLED in­vestors in col­lapsed Virgin Aus­tralia say they have a “su­pe­rior” al­ter­na­tive res­cue plan for the car­rier but have taken a swipe at ad­min­is­tra­tors Deloitte for stymieing the pro­posal.

Lawyers for un­se­cured bond hold­ers in Virgin told the Fed­eral Court on Fri­day they risked be­ing shut out of be­ing able to de­velop the plan if they were not given timely ac­cess to con­fi­den­tial in­for­ma­tion held by ad­min­is­tra­tors

Deloitte on how the suc­cess­ful Bain Cap­i­tal pro­posal was struc­tured.

Bar­ris­ter Ian Jack­man for the bond hold­ers told the court that his clients wanted to put a su­pe­rior pro­posal at a se­cond meet­ing of cred­i­tors due in Au­gust that would re­sult in a bet­ter re­turn for cred­i­tors and en­sure the vi­a­bil­ity of the air­line.

The bond hold­ers – Sin­ga­pore’s Broad Peak In­vest­ment Ad­vis­ers and

Hong Kong Tor In­vest­ment Man­agers – are up­set their own ear­lier pro­posal to re­cap­i­talise the air­line was re­jected by the ad­min­is­tra­tors, de­spite as­sur­ances made through­out the sale process.

Mr Jack­man said the bond hold­ers would only be in­formed about the struc­ture of the Bain deal in a re­port just prior to the Au­gust meet­ing, which would not be enough time to for­mu­late de­tails of its own deed of com­pany ar­range­ment (DOCA) for Virgin.

“The dif­fi­culty for my client is that pe­riod is too short a time to for­mu­late its own DOCA,” Mr Jack­man said. “We wish to ex­er­cise our statu­tory rights to make an al­ter­na­tive pro­posal but we need the in­for­ma­tion on how the Bain deal was struc­tured.”

Judge John Mid­dle­ton said while it was im­por­tant ad­min­is­tra­tors Deloitte com­mu­ni­cated and in­formed cred­i­tors in prepa­ra­tion for the cred­i­tors meet­ing, he would not over­turn his ear­lier order to keep de­tails of the deal un­der wraps.

Virgin Aus­tralia went into vol­un­tary ad­min­is­tra­tion on April 21 with debts of $6.8bn, in­clud­ing $2bn owed to bond­hold­ers. Bond­hold­ers fear they will get as lit­tle as 6.5c in the dol­lar for their in­vest­ment.

Pic­ture: JOSH WONING

Virgin staff Phil Vlieg, Cap­tain An­thony Sav­ille, Peter Arm­strong and Alahna Wilkin­son at Bris­bane Do­mes­tic Air­port.

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