PPRuNe Forums - View Single Post - Private equity take-over for Virgin Australia?
Old 23rd Apr 2020, 05:31
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crosscutter
 
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Originally Posted by BNEA320
but aren't you foregetting that the administrator can make most of that debt mountain go away
Provided it is approved by the required percentage of creditors and the outcome is better than liquidation.

The creditors are stuffed.
The secured creditors are in a pickle as much as the unsecured. They would love to wipe out the bondholders. But the bondholders will know this. As might certain private equity investors. So the bondholders might prefer a debt to equity swap, so ironically, the unsecured bondholders now become a major shareholder. Is this situation less optimal for the majority of creditors? I’m sure it’s being worked out. But If it is better, should a proposal offer the bondholders a debt to equity swap, it might be the best option as it gives the bondholders something, whilst the secured creditors remain untouched as leased aircraft are sent back home.

I’m sure someone (maybe Sunfish) with more knowledge around restructures can provide more light, and I might be quite wrong...but what to do with the bondholders when they amount to $1.8B worth of debt is important. If another administrator got the bondholders, unions and others onside don’t be so sure they won’t be knocking on the Virgin restructure door.
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