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Government Loan to Virgin Australia

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Government Loan to Virgin Australia

Old 23rd Apr 2020, 03:51
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I don't understand how PS can say there will be no redundancies. Is that not a decision the new investors/owners will make assuming they get one? He may well be first out the door.


I can assure you there will be. And the promise of none during the administration is never a locked promise. They've looked at the remaining cash outflows, inflows and balance - and determined they have a few months left of operations which is all they need to determine the pathway for VA. But do not be fooled - at any time - this could change. Likely cheaper to keep people on (even on no pay or on leave) than to pay out redundancy costs.

And it will be a given that if VA comes out - the so-called 'lean, restructured business' will not need the same FTE that exists today. It will be a smaller footprint for sure. The '750' existed already, won't be the end of it.
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Old 23rd Apr 2020, 04:05
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I would imagine any private equity investor will want to drag this out as long as possible to achieve the lowest sale price. This will factor heavily with the administrators who have a limited time frame in view of the cash remaining. At some stage, the decision will have to be made to appoint receivers if an agreed sale price can not be realised within the target time frame, otherwise, secured creditors will suffer.

To even think there won't be significant redundancies is wishful thinking.


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Old 23rd Apr 2020, 04:21
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The article in the AFR gave the suggested time frame from Deloitte. Mid May for expressions of interest-proposals, signed up mid June for a "sale" by the end of June.
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Old 23rd Apr 2020, 04:43
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As a union member in AN, l do not recall being asked about which of the big five (now four) would become administrator.

I suspect Arthur Anderson and the unions were in cahoots on a deal that would kick out Price Waterhouse.
This was too big an opportunity to let go.
And only with the unions blessing was this going to happen.

Obviously, after Enron and the wind-up, Ernst & Young were bringing in house the Anderson business,
Korda and Mentha were to put up $400k each to be a local partner, whilst bringing $65m over the next few years.
The rest is history.

Makes you wonder how much the union/officials/individuals got for allowing this to happen

halas
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Old 23rd Apr 2020, 04:53
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It is hard to see how Deloitte will be able to put together a Deed of Company Arrangement that has a Sales and Purchasing Agreement that emboldens the "White Knights" and creditors to allow the Deed Administrators to do anything necessary or convenient to sort this out. It is a tall order to expect the white knights to settle the $5B to the major foreign shareholders then also fund the OPEX side of the new operation as it rebuilds. Then there is the matter of all the other creditors such as VAH staff and the extended supply chain also being in agreement. To fund VAH as going concern in some form will require circa $7B which is hard to see it happening among any of the 10 white knights when they see the books in some details. Give the skinny margins in the airline game of 5% return pa if you have a good year its going to take a very long time to pay back $7B out of the profits and then move forward. Its a big call to see it pulled off, but hopefully, some how it needs to happen.
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Old 23rd Apr 2020, 05:03
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It is a tall order to expect the white knights to settle the $5B to the major foreign shareholders
I may be wrong but I don't think that it is the shareholders in the main, that are owed the $5 billion. At least $2 billion was bonds issued in October 2019.

I agree it is a big ask to get all the parties that need to agree to this, to actually agree and sign up for a DOCA.
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Old 23rd Apr 2020, 05:18
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I would strongly advise against some of the wishful thinking displayed here for your own benefit. VA in VA is not a good position to maintain employment for all pilots and take the fight to others. I understand the denial but it is setting you up for a double fall.
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Old 23rd Apr 2020, 06:00
  #1028 (permalink)  

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Originally Posted by DanV2
Air New Zealand originally appointed PriceWaterhouseCoopers (PWC) as AN's administrators. Due to hostility by unions and other creditors, PWC was dumped in favour of Arthur Anderson who appointed Korda and Mentha (Both guys consequently left Arthur Anderson and formed their own company KordaMentha).
Yes. PWC were looking at the industry as a whole & whether it was viable to keep it flying. They surmised that the best chance for creditors was to wind it up immediately. If they had, we probably would've gotten more cash wise, and sooner naturally.

Originally Posted by halas
As a union member in AN, l do not recall being asked about which of the big five (now four) would become administrator.

I suspect Arthur Anderson and the unions were in cahoots on a deal that would kick out Price Waterhouse.
This was too big an opportunity to let go.
And only with the unions blessing was this going to happen.

Obviously, after Enron and the wind-up, Ernst & Young were bringing in house the Anderson business,
Korda and Mentha were to put up $400k each to be a local partner, whilst bringing $65m over the next few years.
The rest is history.

Makes you wonder how much the union/officials/individuals got for allowing this to happen

halas
The Unions wanted it kept flying and in hindsight, we see that their power diminished in the workplace once it was gone. Staff are merely an afterthought to all of these 'players'.
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Old 23rd Apr 2020, 07:13
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Hereís the ACTU statement at the time for Ansett

https://www.actu.org.au/actu-media/a...nted-to-ansett
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Old 23rd Apr 2020, 07:52
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So how does this play out?
VA get a new name can't keep paying that knuckle head in the UK the ridicules money that has been paid
330s gone, ATRs gone both expensive machine to operate ATR especially considering half the work force are in BN and not even having a base there, 777 well nothing really been mentioned there. The real question is what comes of the 737 how many remain and what will the new product be, I would think they will try and continue the high end market (AC are already configured etc) with a lean much less payed crew, maybe even less than JQ. Consider these crew have had the threat of no employment, loosing their jobs so they will be keen to do what ever it takes to get things going.
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Old 23rd Apr 2020, 08:31
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I can see some problems looming:

1) Deloittes may have disqualified themselves from the role of administrator.

2) Some unsecured 'junk' bond holders may make it difficult for the administrators who ever they may be and UBS with the possibility of legal action.

3) I was surprised to see Scurrah conduct the recent press conference with Strawbridge. It should have been the other way around.

4) I am surprised at some of the statements being made by Scurrah and Strawbridge, even after allowing for the statements being made in Queensland.

5) I will be surprised if a deed of company arrangement can be offered to the VA directors by the administrator.

6) The employees are behind the secured creditors and the lenders who hold mortgages over aircraft.

7) On 01/07/2019 Moody's reported the airline had loans of $3B against the fleet and owed $2.6B on aircraft operating leases.

8) If BGH and partner(s) were to make an acceptable offer to the administrator the airline base will be in Melbourne sans Scurrah who is seen as being a slow mover by his lack of action. The Virgin name will be consigned to the history books. .

9) Interest from Apollo Global and Oaktree Capital most likely would see Virgin broken up by asset stripping.

10) What happens with VA will be decided by 30/06/2020 and influenced by the number of carriers who go broke each day between and late May 2020.

Ps. Forget about Branson being a white knight for VA. There is a possibility Virgin Atlantic may fall over if Delta decide to walk away from Virgin Atlantic to save themselves. Similar to what Air New Zealand did with Ansett.

Last edited by B772; 23rd Apr 2020 at 09:38.
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Old 23rd Apr 2020, 09:20
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The best option for the creditors may well be to preserve the cash and immediately appoint receivers to disburse the available funds. Not sure if the creditors could force this or it would need to come from the administrators, who at this stage, still seem to be working out the true position.
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Old 23rd Apr 2020, 10:46
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I was surprised to see Scurrah conduct the recent press conference with Strawbridge. It should have been the other way around.
Good pick up. Scurrah did not even need to be there.
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Old 23rd Apr 2020, 11:27
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Hmmm-

'772' et-al, yes agree............, on all.

Point #1: PwC got 'rolled' on the AN Gig (back when) for, a consultation off-shore (not one of consequence- given current media quotations.. on the VAH gig- 'I' Believe????) in NZ with an NZ domiciled and registered entity, same Brand- but, NOT an entity inside the AU border/economic zone............... nor, were the contracting 'client'/entity .......???? from Memory?????

'772/& Icarus' Point #3- Roger That.... in Spades!!!!

The Rodeo 'begins'- once more............

Rgds
S28- BE
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Old 23rd Apr 2020, 13:07
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Air Mauritius now in administration. Four units of Norwegian has filed for bankruptcy grounding 1,571 pilots and 3,134 cabin crew.
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Old 23rd Apr 2020, 13:36
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Originally Posted by B772
Air Mauritius now in administration. Four units of Norwegian has filed for bankruptcy grounding 1,571 pilots and 3,134 cabin crew.
So COVID-19 kills around 160 people per day worldwide. No death is a good death, however in comparison;
  • There are approximately 26,000 deaths per day from Cancer worldwide.
  • Coronary deaths are around 25,000 per day.
  • Diabetes deaths are around 4,400 per day.
  • Suicide takes around 2,000 to 3,000 lives per day.
  • Vector borne diseases (spread by animals) account for 700,000 deaths per year, of which at least 440,000 are by mosquitos alone through transmitting malaria and dengue fever which is around 1,205 per day.
  • Homicide takes around 1,270 lives per day.
  • 378 people die from snakebite each day.
Now, I donít wear a tinfoil hat and I know the illnesses above arenít spread by cough droplets, but FFS enough is enough. Give people their lives, liberty and freedom back and end this global lunacy at the hands of Governments. Have they never heard the saying Ďthe cure is worse than the causeí? This is bullshit! People are losing their livelihood, their future, their soul. Millions upon millions of jobs, businesses, all gone. Years of recovery ahead of the world! The madness has to stop.


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Old 23rd Apr 2020, 14:25
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Originally Posted by Paragraph377
So COVID-19 kills around 160 people per day worldwide. No death is a good death, however in comparison;
  • There are approximately 26,000 deaths per day from Cancer worldwide.
  • Coronary deaths are around 25,000 per day.
  • Diabetes deaths are around 4,400 per day.
  • Suicide takes around 2,000 to 3,000 lives per day.
  • Vector borne diseases (spread by animals) account for 700,000 deaths per year, of which at least 440,000 are by mosquitos alone through transmitting malaria and dengue fever which is around 1,205 per day.
  • Homicide takes around 1,270 lives per day.
  • 378 people die from snakebite each day.
Now, I donít wear a tinfoil hat and I know the illnesses above arenít spread by cough droplets, but FFS enough is enough. Give people their lives, liberty and freedom back and end this global lunacy at the hands of Governments. Have they never heard the saying Ďthe cure is worse than the causeí? This is bullshit! People are losing their livelihood, their future, their soul. Millions upon millions of jobs, businesses, all gone. Years of recovery ahead of the world! The madness has to stop.

160 a day worldwide? UK alone is 7-800 a day of which itís being assessed to be double in reality due to mis-reporting of others.

Worldwide the figure is at 7000 daily deaths before mis-reporting.

If there wasnít a lockdown, itíd soon be hundreds of thousands of deaths per day until herd immunity built up. Very quickly COVID-19 would climb to the top of your charts if left to its own devices.

Thats why staying at home until weíre better prepared isnít madness.
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Old 23rd Apr 2020, 14:32
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“This is bullshit! People are losing their livelihood, their future, their soul. Millions upon millions of jobs, businesses, all gone. Years of recovery ahead of the world! The madness has to stop.”

Maybe, but this downturn was going to be the biggest economic contraction for decades without Corona. You cannot pump trillions of worthless fiat into a global economy and expect it never to go bang.

For sure the virus has made it worse and the has made the collapse much faster but make no mistake central bankers all over the western world are keen to ensure as much blame as possible is misdirected to corona lest the real blame fall at their feet due to decades of mismanagement.

The CARES stimulus here in the US is yet another bail out for investor class malfeasance.
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Old 23rd Apr 2020, 21:30
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Paragraph337, if you don’t do lockdown, you will destroy the entire health system, closely followed. by Western societies as supply chains lock up and starving people start rioting, followed by looting and destruction.

No one is going to work if they cannot be offered the prospect of medical attention if they have an accident or fall ill.
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Old 23rd Apr 2020, 22:04
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Agreed Sunfish, however if you don’t have an economy you can’t afford to run a health system. Impossible dilemma. People without employment and income will also riot no matter what the state of the health system.
This is triple problem, economy, health and political. Lockdown is for some an easy decision as most of those in favour have employment and income certainty regardless. That would be politicians and public servants not forgetting self funded individuals.












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