It seems that Virgin Australia (ASX: VAH) is about to have a new owner after Cyrus Capital pulled out of the running.
What is Virgin Australia?
Virgin Australia is a holding company for Virgin Australia International Airlines, Virgin Australia Domestic Airlines and also Tigerair Australia. Tigerair was acquired by Virgin in 2015.
What has happened with the process?
Virgin is currently going through a bidding process of potentially being rescued. It’s being carried out by Deloitte administrators.
It had gotten to the point of just two bidders remaining, Bain Capital and Cyrus Capital Partners.
But it seems Cyrus has pulled out. Cyrus said in a statement: “On the morning of 22 June 2020, Cyrus presented to the administrators of Virgin Australia Holdings an offer to acquire the airline, its regional business and the frequent flyer program Velocity, in accordance with the administrators’ procedures.
“However, since then, the administrators have not returned calls, emails, or meaningfully engaged with Cyrus to progress its offer.”
So Bain is the last bidder standing?
It would seem that Bain is now the winner by default, though Cyrus has indicated it is willing to re-engage with administrators if they will also engage.
However, apparently Virgin’s bondholders have offered to inject about $1 billion of cash into the business.
Summary
It’s an interesting time to be an airline business considering the ongoing troubles with COVID-19. Qantas (ASX: QAN) itself has had to raise capital to ensure its survival through the next few years.
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Disclosure: At the time of writing, Jaz doesn’t own shares in any of the businesses mentioned.
