The airline’s managers announced on Friday that it has selected Bain Capital, a US private equity firm, to take over the company, which has been bankrupt for two months. The terms of the transaction were not disclosed.
Bain & Company defeated Cyrus Capital Partners, a New York-based investment company, which also submitted a binding offer.
The manager said that “several other proposals” were also submitted this week, including proposals from some airline bondholders.
Bain Capital said it hopes to “protect as much work as possible” on Virgin Australia while supporting the airline’s “unique culture.” The airline has about 10,000 employees.
Mike Murphy, managing director of Bain Capital, wrote in a statement: “We are determined to see Australians have long-term access to competitive, viable air services.”
; He added , Bain will strengthen Virgin Atlantic’s “regional services” while continuing to provide flights for business and leisure travelers.
On the occasion of the rescue, the coronavirus pandemic continues to damage global travel demand. The International Air Transport Administration estimates that international travel may take more than three years to return to pre-crisis levels.
Virgin Australia, Australia’s second largest airline, applied for voluntary management in April after failing to obtain the government support it requested. Earlier that week, billionaire founder Richard Branson called on the central government for assistance and even said he would provide his Necker Island real estate in the Caribbean as a mortgage. (Other major shareholders in Virgin’s previous administration include Etihad Airways, Singapore Airlines and Nanshan Capital Holdings.)
Virgin Australia’s main local competitor, Qantas, is also struggling to survive. Qantas (QABSY)As Australia’s flagship airline, the company announced on Thursday that it will lay off 6,000 people and raise up to 1.9 billion Australian dollars (1.3 billion US dollars) because it bears “the biggest crisis facing our industry”.
Although the Australian federal authorities refused to directly provide assistance to Virgin Australia, they stressed the importance of aircraft carrier survival.
“We want to have a highly competitive aviation market in Australia. We want to see these two airlines [Virgin Australia and flag carrier Qantas] Flight and competition. “Prime Minister Scott Morrison (Scott Morrison) told reporters last month.
Virgin Australia managers said Friday that the transaction may face “minimum” regulatory review.
The management said that Bain has obtained preliminary regulatory approval from the Australian treasurer and is now in the process of restructuring and final sale with the airline.
— Angus Watson contributed to this report.