Deloitte getting nervous or something, or, standard for a CEO to ensure they get the troops to fall in line!
Virgin CEO says Bain sale ‘must go ahead’
ROBYN IRONSIDE
Virgin Australia chief executive Paul Scurrah has written to employees outlining why the airline cannot afford for its sale to Bain Capital to be disrupted.
In an email seen by The Weekend Australian, Mr Scurrah said an essential element of the sale agreement was the provision of a loan to allow the airline to continue to trade until the sale was completed.
“Any delay to the administration process would mean we remain in administration for a longer period,” said Mr Scurrah.
“From day one the goal has been and remains, to bring this business out of administration as quickly as possible and avoid the potential outcomes of going into liquidation, which is not something any of us want.”
Virgin Australia went into administration on April 21 with debts of $6.8bn, including $2bn owed to bondholders who want to convert that debt to equity in the airline. Their proposal was rejected by administrators Deloitte due to the binding agreement signed with Bain.
But on Monday the Federal Court will consider whether the bondholders should be allowed to put their proposal to creditors for a vote.
Key bondholders, Broad Peak Investment Advisers and Tor Investment Management, claim to have received “indications of support” from a number of other financial institutions, including Credit Suisse, Deutsche Bank, UBS and Morgans.
In his email titled “message to everyone”, Mr Scurrah told employees it would be very disruptive to the sale of Virgin if “for some reason an alternative proposal was allowed” to be put to creditors and voted on.
“We are working incredibly well with Bain Capital and are aligned on our vision to get through COVID-19 and become a profitable and successful business in the future,” Mr Scurrah said. “Bain is the right partner for us and is committing an extraordinary amount of resources, time and expertise to this business.”
He described the proposal put forward by bondholders as “nonbinding, conditional, indicative and incomplete” and apologised that it had created so much noise in the media.
“I know this has a huge impact on you all personally and is unsettling,” Mr Scurrah wrote.
“I can assure you that Bain Capital remain 100 per cent committed to completing the sale and enabling us to be a fierce competitor for years to come with them as our partner.”
Monday’s court hearing before Justice John Middleton has been set down for 2.15pm.
The second creditors meeting is expected to be held on September 4, with the administrators to release their report to creditors in the week of August 24.
The bondholders’ bid has been advised by five former Virgin Blue executives, including co-founder Rob Sherrard.
Under the proposal Virgin Australia would remain an ASXlisted company and include an employees representative on the board.
An $800m capital raising would be undertaken to finance the airline.