Deloitte will settle on a final shortlist of two preferred bidders for Virgin Australia early next week after parties reaffirmed their interest.
Melbourne-based BGH Capital and US-based private equity firms Bain Capital, Indigo Partners and Cyrus Capital Partners had until 1400 AEST on Friday to reaffirm their non-binding bids for the debt-laden airline.
Brookfield Asset Management, which pulled out of the first bidding round, submitted a proposal on Friday with the encouragement of Deloitte and unions, a source with knowledge of the matter told Reuters on condition of anonymity.
Lead administrator Vaughan Strawbridge said the “competitive tension that has resulted from the process conducted to date confirms that all the parties have a genuine interest in the future of Virgin Australia, and see real value in the business, despite the uncertainty about when travel restrictions will be lifted”.
Mr Strawbridge said Deloitte this week held close to 100 meetings with bidders and stakeholders groups, including unions and governments, regarding the bids.
While the Australian Financial Review reported that bids would be in the $3.5 billion to $4 billion range, Mr Strawbridge called this “just speculation, and we won’t know what that value might be until binding offers are required in mid-June”.
Binding offers are due on June 12.
Warren Staples, a senior lecturer in the School of Management at RMIT University, said bidders seemed to be pitching much smaller operations than the 130 planes Virgin Australia had flying.
“There seems to be consensus around a more pared-back strategy and this will result in some pain for current Virgin employees,” he said.
Bidders were talking about flying fewer than 15 operational planes in the face of COVID-19 decimating the global aviation industry.
“Regardless of who is ultimately successful this is likely to mean that regions and tourism are going to be hit hard, and this reboot will not be a serious competitor for Qantas,” Mr Staples said.
Liquidation remained a possibility, he said.
Virgin owed nearly $7 billion to creditors when it entered voluntary administration last month.