Lang, Virgin team admit difficulties
26nov01
THE main players in the Lang Corporation/Virgin Blue bid for Ansett assets emerged today from a meeting with the airline's administrators admitting they faced a difficult task.
Lang Corp managing director Chris Corrigan agreed the bid might not have a hope unless Melbourne businessmen Solomon Lew and Lindsay Fox pulled out their rival $3.6 billion bid.
"That's probably, technically, so," Mr Corrigan said.
"But the Fox/Lew proposals have a large number of conditions precedent, as we understand it, and who's to know whether those are satisfied or not?"
In a deal struck at the weekend, Lang Corp would take a majority stake in Virgin Blue if it successfully bid for Ansett's assets and infrastructure.
The administrators, Mark Mentha and Mark Korda of Andersen, have conditionally agreed to sell the failed airline to Melbourne businessmen Mr Lew and Mr Fox.
Virgin Blue chief executive Brett Godfrey, who also met with the administrators, said they had put together a good alternative bid and he was confident the administrators would consider it.
"It's been made pretty clear that they are pursuing the Fox/Lew bid but there are a lot of conditions," he said.
"We have basically come out with a piece of paper that says we can do it with not too many conditions attached to what we are asking, other than for more information."
He denied the companies had been tardy in putting their proposal forward, saying discussions had been underway for some weeks.
Richard Branson's Virgin Blue could become Australian-controlled after transport logistics giant agreed to take a majority $300 million stake in the airline.
However, the deal hinges on Lang Corp buying the assets and infrastructure of collapsed carrier Ansett.
"Virgin Blue now is the second airline in Australia and it's got a very unique and exciting business model and so we're very attracted to that," Mr Corrigan told Channel Nine yesterday.
"There's a great opportunity for it to become a much larger operator in the Australian market and to offer a very significant difference to what, in terms of passenger offering, than what Qantas is offering today."
But Mr Corrigan said "there's not much point in expanding Virgin if it's going to not be able to get access to key assets that would allow it to expand rapidly".
He said the Virgin/Lang Corp plan incorporated the Ansett terminals, maintenance facilities, and around 1500 Ansett staff
. He said the airline, under Lang Corp, would maintain its low fares and one class operation.
"This is a very modern and a very successful business model," he said. "It's been tried elsewhere in the world and it would offer a very significant point of difference ... to the Qantas two-class, full service airline."
Mr Godfrey said his company could capture 30 per cent of Australia's domestic aviation market if the deal with Lang Corp and Ansett was successful.
Mr Godfrey said Virgin Blue had agreed to the Lang Corp deal because its current facilities would reach maximum capacity in about 18 months and Ansett's terminals and other facilities would allow it to grow substantially.
Last Thursday, Federal Transport Minister John Anderson said the Fox/Lew consortium would not receive government financial assistance.
Following a meeting with the businessmen, Mr Anderson said all outstanding issues had been resolved apart from two regulatory issues which he declined to detail.
Asked whether this meant the bid would now proceed, Mr Lew said: "We've signed a transaction with the administrators, so therefore we have somewhat bought Ansett but it does have conditions."
Mr Godfrey said if the Virgin/Lang/Ansett deal was unsuccessful, Virgin would continue its current operations.
Today the ACTU said only 2000 former Ansett workers would keep their jobs under the Virgin-Lang proposal to buy the failed airline.
ACTU secretary Greg Combet told ABC radio the jobs of the 16,000 staff should be the focus of any takeover.
And he questioned the viability of a the proposal by discount airline Virgin Blue and transport logistics giant Lang Corporation.
AAP