By
Patrick HatchJuly 8, 2020 — 9.13am
One of Virgin Australia's largest bondholders has launched court action to unseal the secret details of
a deal to sell the bankrupt airline to private equity firm Bain Capital as it steps up its efforts to take control of the company.
Broad Peak Investment lodged an interlocutory process in the Federal Court on Tuesday seeking access to the sale agreement between Virgin's administrator Deloitte and Bain.
Bain and Deloitte have refused to say how much the private equity firm will pay Virgin's creditors, which are owed a combined $6.8 billion, or how many of Virgin's 9000 workers will lose their jobs.
Broad Peak, a Singaporean hedge fund, was part of a group of bondholders that proposed swapping their $2 billion in debts for ownership of Virgin. Deloitte passed over the proposal and a rival bid from Cyrus Capital in favour of Bain.
Tuesday's court action comes
after it was revealed on Monday that Broad Peak and Hong Kong-based bondholder Tor Investment Management have applied to the Takeovers Panel to intervene in the sale to Bain, arguing the way Deloitte ran the administration was "unacceptable" and blocked them from presenting their alternative deal to creditors at the second creditors' meeting in August.
Broad Peak's legal action is
seeking a variation to the court's non-publication order over the Bain deal so that Broad Peak, the Takeovers Panel and
any party involved in the Takeovers Panel's proceedings can access the documents.
The bondholder group is being advised by boutique Sydney firm Faraday Associates and lawyers from Corrs Chambers Westgarth. The group's debt-for-equity plan involved pouring $925 million into Virgin to keep the company alive and listed on the Australian Securities Exchange.
Virgin's $2 billion worth of unsecured bonds are owned by
30 large institutional investors and about
6000 "mum and dad" retail investors. Broad Peak is backed by Singapore's sovereign wealth fund Temasek, which held an interest in Virgin through its majority ownership of Singapore Airlines, which in turn owned 20 per cent of Virgin.
More to come