Cyrus Capital backs out of Virgin Aust bid

Cyrus Capital Partners has withdrawn its bid for Virgin Australia, citing a lack of engagement by the airline’s administrator, but said it was willing to reinstate it under certain conditions.

The US-based private equity group had been one of two final bidders selected by the administrator, Deloitte, alongside Bain Capital, although bondholders on Wednesday also submitted a separate proposal to recapitalise the airline.

The Australian Financial Review on Friday reported, without citing sources, that Deloitte was preparing to sign a deal with Bain.

Cyrus said in a statement that it would be willing to reinstate its offer if Deloitte agreed to re-engage in good faith with a view to concluding a transaction.

The private equity group, which was one of the founders of Virgin America alongside Richard Branson, said Deloitte had not returned calls, emails or meaningfully engaged with Cyrus to progress its offer, even after it sweetened the proposal on Thursday.

“I am disappointed that it has become necessary to withdraw our offer,” said Stephen Freidheim, Cyrus’ founder and chief investment officer.

Deloitte did not respond immediately to a request for comment.

The administrator on Thursday spoke with leaders of unions representing Virgin Australia employees but did not provide any details of which offer was preferred at this stage, the heads of pilot and engineers unions told Reuters.

“For the record, the ALAEA has preferred Cyrus and absent of further information, that position is unchanged,” Steve Purvinas, the head of the Australian Licensed Aircraft Engineers’ Association (ALAEA) said after the meeting.

Deloitte has said it hopes to select a preferred bidder by June 30. 

Be the first to comment

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.