Originally Posted by
Icarus2001
Understood but that is very much "past tense", there is no huge cash-flow now or for at least twelve months. Assets are aircraft that are actually owned, not financed, GSE, terminal equipment and office equipment...
Spot on. Just to be clear, while Scurrah had tried to talk it up when releasing the first half results in February, Virgin's free cash flow wasn't stellar. At less than 6 per cent, for an airline (where essentially all your revenue comes weeks to months ahead of expenditure), it was actually pretty ordinary.
And further to your observation that there is currently no cash flow, it's actually worse than that. Because of the decision to honour all of the travel credits that had been issued in lieu of refunds, the business will very likely have a negative to very low positive cash flow for the next twelve to eighteen months.
As to all this hoopla about Bain’s secret plans, I would have thought that their plan was blazingly obvious. Acquire the business at the right price, prop it up while knocking it into proper shape (that is, rework the debt, shed anything that doesn't make money whether it's a route or an entire business unit, get the cost base under control and try to instil an outcomes driven business focus), book at least a year's worth of solid underlying earnings and then refloat it. It is by necessity a medium term plan. This was never going to be an in-and-out.