The bidding for Virgin Australia is entering its final stage with both Bain Capital and Cyrus Capital Partners submitting their final and binding offers for the airline.
Deloitte said the administrators handling Virgin’s affairs will now assess the bids with a view to selecting a preferred bidder by Tuesday, June 30.
“On the basis of their public statements, both bidders are committed to seeing a strong, competitive and sustainable Virgin Australia operating into the future, employing many thousands of Australians, and supporting the tourism industry and state and national economies,” Deloitte said in a statement.
Details of their bids were not disclosed, although Deloitte said both bidders have already received Foreign Investment Review Board approval.
Both bidders have previously flagged operating a smaller, single-branded domestic and short-haul international airline that also has growth potential, Deloitte added.
Reuters reported on Monday that Virgin Australia’s bondholders were working on a debt-to-equity swap if they weren’t satisfied with the sale offer, citing a person with knowledge of the matter.
The airline owes about $2 billion total to 6,500 unsecured bondholders, the second-most numerous creditor group behind employees that will vote on a deal at a meeting in August.
The bondholders are preparing the backup plan to help avoid liquidation if the administrator’s preferred offer is not acceptable, the person with knowledge of the matter told Reuters on condition of anonymity.
The threat of a rival plan could also make the bidders and the administrator, Deloitte, more attuned to their interests.
Although not all of the details have been worked out, the bondholders want the debt-to-equity swap to happen soon, ahead of a later sale once coronavirus-related volatility in the airline industry subsides, the person said.
Virgin bondholders include FIIG Securities, Northern Trust Asset Management, Sargon CT and The Bank of New York Mellon.