Virgin Australia creditors fail in legal bid to force vote on alternative rescue plan
◆ Bondholders seeking to derail the takeover of Virgin Australia by US private equity giant Bain Capital have had their request to put an alternative rescue plan to creditors rejected by a Sydney court, writes Simon Foy.
Yesterday’s ruling did not block any alternative proposal being circulated to creditors ahead of a meeting on Sept 4. However, it threw out a specific request to force Deloitte, the airline’s administrator, to hold a vote on two separate proposals.
Bain’s takeover has faced growing legal opposition in recent weeks as a group of bondholders including UBS, Deutsche Bank and others try to block the move and salvage some of their investment. The group holds A$800m (£438m) of the airline’s debt.
Virgin Australia, founded by Sir Richard Branson, collapsed in April owing A$6.8bn, which led Deloitte to fast-track a sale to Bain before the airline ran out of cash. About 1,000 staff were made redundant in April while 8,000 others were furloughed, leaving just 1,000 still working.