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20 buyers now circling Virgin Australia

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20 buyers now circling Virgin Australia

Old 11th Jul 2020, 06:06
  #641 (permalink)  
 
Join Date: Feb 2001
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Originally Posted by didrechambers77 View Post
I get the stress and anxiety you may have about Bain etc, but remember the place hasn't had this caliber of consultants though before. Remember, the current mob couldn't really run it for a profit so any change would have to be a good change. There's parallel PMO's, weekly steer co's, and probing interviews from the consultants already well underway. After years of spinning money at Bevington producing results and findings only to find the steer co. preso's the SLT/ELT tossed in the bin, you'll find these consultants will finally be able to enact change (given their parent company is the owner). Few corporations can afford the rates of Bain Consultants, so if you're in for the long haul you're in pretty safe hands.
What do you know of the Calibre?

Who ends up paying for these Consultants?

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Old 11th Jul 2020, 06:10
  #642 (permalink)  
 
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Mick,

Fair to say it's all about the DOCA. There are still steps to be taken by Bain to reach a DOCA. The way I read it, the door is still open for Legal action against Deloitte.

Interesting times.

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Old 11th Jul 2020, 06:18
  #643 (permalink)  
 
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Originally Posted by didrechambers77 View Post
Few corporations can afford the rates of Bain Consultants, so if you're in for the long haul you're in pretty safe hands.
Bain Capital and Bain & Co are separate (Bain Capital was spun out many years ago, although many employees are former Bain (and other) consultants).
I'm sure VA has had more than an army of management consultants around over the years.
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Old 11th Jul 2020, 09:29
  #644 (permalink)  
 
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'Respect' to all of you, above!!!- 'it' ain't a "DOCA" at this point in time..............

ex 'MickG'...... (bolding)-
unequivocally resolved by Justice Middleton on Friday when he dismissed the bondholders' application to be given access to the details of the Bain proposal, with costs awarded against them.
Would appreciate, being educated vis- 'Middleton' and 'his', "reported" comments, (ex the SMH Article: https://www.smh.com.au/business/comp...10-p55auo.html ) below.

Quote #1:
Federal Court judge John Middleton dismissed the bondholders' request for the documents after putting the administrator ('on' Notice, that is S28- faks me) notice to share information with bondholders to avoid a legal battle. He left the door open for bondholders to return to court if they were concerned about how the process was being handled by Deloitte.

"The administrators may have to make some rather hard decisions about how much they do disclose information for the purposes of the second creditors' meeting. If they take a particular approach the second creditors' meeting may become litigious," Justice Middleton said.

"I'm just... warning is putting too fine a point on it I may say," he said.

He said it was in "everyone's interest" for as much communication as possible to flow between administrators and creditors as this would alleviate concerns and allow people to gather information to consider the options available.

Quote #2:
Mr Jackman told the court his client had been confused by a public statement by Deloitte that the sale of Virgin was a done deal, given it now claimed Bain will also be putting forward a DOCA at the meeting."We are confused as to how the administrator, no doubt with advice, has come to the conclusion that it is a fait accompli and whatever happens at the second creditors' meeting can't change the asset sale to Bain."

Bondholders welcomed Justice Middleton's comments during the hearing and said they looked forward to working with administrators and other Virgin stakeholders to present their recapitalisation plan.
Many thanks- ta
rgds
S28- BE




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Old 11th Jul 2020, 09:46
  #645 (permalink)  
 
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Yes, I think Mick overstated the effect of Middleton J's decision.
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Old 11th Jul 2020, 10:45
  #646 (permalink)  
 
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Mick, with respect, NO. You can’t extinguish the bond holders rights without liquidating the entity that issued the bonds.

‘’To put that another way, Virgin doesn’t get to say “bondholders, you have done your dough” and then enters into an agreement to borrow and repay money to Bain or the Federal government, or Queensland for that matter.

If the bond holders go under then EVERYONE has to go under and that usually means liquidation.

I don’t give a flying #$%^ what deloittes, Bain, Virgin, GT says, this is the stuff of multi year court cases because each situation is different. Of course Bain wants to screw the unsecured creditors. Deloittes is supposed to have the interests of ALL the creditors at heart. What the bond holders are concerned about is that this does not seem to be happening as far as they are concerned.

Pari Passu means that all members of the same class of creditor have to be treated EQUALLY. That also extends through time. If that were not the case, companies could finance themselves forever by defaulting on their current debt and then taking on new debt, then defaulting, rinse and repeat.

The practical market for defaulted bonds revolves around buying worthless national bonds and then, when the country tries to borrow more from the IMF, world bank, etc. sticking it to them to pay out their existing bonds before they can borrow again. Patient traders make lots of money this way.

I wouldn’t even be surprised if a predator wasn’t offering to buy the Virgin bonds at a deep discount right now. This is heavy legal stuff above my pay grade, but saying “the bond holders have no rights” is bullshit.


And to put it yet another way, the idea that 51% of creditors get to screw the other 49% is bullshit for the same reason. This is the stuff of long court cases, there is nothing sacred about a ‘’deed of company arrangement” - it’s just like a union ambit claim.
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Old 11th Jul 2020, 11:09
  #647 (permalink)  
 
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It's interesting to read an authoritative explanation of who's who in the zoo:
2. On 26 June 2020, the Administrators executed a binding Implementation and Sale Deed (Sale Deed), in which the business and assets of the Virgin Companies were sold to BC Hart Aggregator, L.P. and BC Hart Aggregator (Australia) Pty Ltd (the Purchasers), which are subsidiaries of Bain Capital Private Equity LP, Bain Capital Credit LP and their related entities (Bain Capital).
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Old 11th Jul 2020, 11:37
  #648 (permalink)  
 
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Media Release- Aus Gvt Takeovers Panel: Friday, 10 July2020

There is 'stuff/trading' going on......., no doubt about it......!!!!

Virgin Australia Holdings Limited (Administrators Appointed) 02–Panel Application Withdrawn

The Panel has consented to a request by Broad Peak Investment Advisers Pte. Ltd. (for and on behalf of BroadPeak Master Fund II Limited and Broad Peak Asia Credit Opportunities Holdings Pte. Ltd) and Tor Investment Management (Hong Kong) Ltd to withdraw their application to the Panel dated 3 July 2020 in relation to the affairs of Virgin Australia Holdings Limited (Administrators Appointed)(VAH).
Link here: https://www.asx.com.au/asxpdf/202007...p5w55l3sjn.pdf

rgds all
S28- BE
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Old 11th Jul 2020, 13:17
  #649 (permalink)  
 
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One step further Section and, to anyone interested:

https://www.fedcourt.gov.au/media/on...g-20200710.mp4

They removed the Panel Application because the matter will be dealt with the Federal Court if required. (48 mins in.)

Godspeed
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Old 11th Jul 2020, 22:38
  #650 (permalink)  
 
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Originally Posted by Sunfish View Post
Mick, with respect, NO. You can’t extinguish the bond holders rights without liquidating the entity that issued the bonds.
Well, we shall see.

Originally Posted by Sunfish View Post
If the bond holders go under then EVERYONE has to go under and that usually means liquidation.
That's a load of tosh. You seem to be completely ignorant to the notion of classes of creditors. The bondholders are unsecured creditors; save shareholders the bondholders are at the bottom of the pile.

Originally Posted by Sunfish View Post
I don’t give a flying #$%^ what deloittes, Bain, Virgin, GT says, this is the stuff of multi year court cases because each situation is different.
Of course because you are far better informed than two global entities.

Originally Posted by Sunfish View Post
Pari Passu means that all members of the same class of creditor have to be treated EQUALLY.
Emphasis on 'of the same class'.

Originally Posted by Sunfish View Post
And to put it yet another way, the idea that 51% of creditors get to screw the other 49% is bullshit for the same reason.
​​​​​​​Well, that is exactly the way that the vote on a DOCA goes. So long as all creditors within a class are treated equitably if 51 percent by value and number vote for a DOCA it passes.

Originally Posted by Sunfish View Post
... there is nothing sacred about a ‘’deed of company arrangement” - it’s just like a union ambit claim.
You are trying to rewrite corporation law there. An approved DOCA sets the basis for the continuing operation of the business.

​​​​​​​I'm not going to get into yes it is, no it isn't to and fro. Let's just see where this lands in six weeks time.
​​​
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Old 11th Jul 2020, 23:24
  #651 (permalink)  
 
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So in short what is actually going on? I’m not a lawyer or business savvy law person will Bain be blocked or not by these bond holders and force liquidation?
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Old 11th Jul 2020, 23:29
  #652 (permalink)  
 
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Mick, with respect, the corporations law is almost as opaque as CASA regulations. You are assuming a clarity that does not exist. If the law was as you say it is, the bond holders would not be investing hundreds of thousands of dollars (and potentially millions) in court action. The bond holders are not noted for being stupid, nor are they noted for throwing good money after bad. Section and Blackout have both noticed this.

That's a load of tosh. You seem to be completely ignorant to the notion of classes of creditors. The bondholders are unsecured creditors; save shareholders the bondholders are at the bottom of the pile.
I know they are unsecured, that is not the point. They are entitled to their share of the value realised. The question they are asking is has this value been maximised? Bain and Deloittes won’t tell. Furthermore, there is the question of some unsecured creditors being more equal than others.

Of course you are better informed than two global entities.
I have perhaps $100 million experience in dealing with Macquarie, BT and major “venture” players in this country and I still have the mental scars from it. These people will sell their own grandmothers.There is no dirty trick too low for them to use. The public school accents and nice suits have obviously fooled you.

‘’Regarding “of the same class”, DOCA, etc, you didn’t understand what I wrote. What I am trying to explain is that it is not as simple as signing a DOCA and starting again.

For example if Virgin defaults, 2 billion in bonds go up in smoke, it gets sold for peanuts to Bain, Bain or the Federal Government loan Virgin money to continue and Virgin pays interest on that money. That means that virgin could have made a deed of arrangement with its creditors and thus the bonds didn’t need to be extinguished.

The bond holders do have rights, they have a right to go through the proposed deal with a fine tooth comb and the FACT THAT BAIN AND DELOITTES WONT LET THEM, Tells me all I need to know.

‘Get it through your head that this is a wrestling match with no rules, not a simple yes/no transaction.




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Old 11th Jul 2020, 23:57
  #653 (permalink)  
 
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Originally Posted by Blackout View Post
Mick,

Fair to say it's all about the DOCA. There are still steps to be taken by Bain to reach a DOCA. The way I read it, the door is still open for Legal action against Deloitte.

Interesting times.
Yes, it will come down to the presentation of a DOCA at the second creditors' meeting.

The mechanics of the second creditors' meeting, in particular a vote on a DOCA, are fairly straightforward. If Bain has the secured creditors and the unions on side, the DOCA will be approved. If Bain has only the secured creditors on side but everyone else votes against the DOCA, the vote will be split between value and number; in this case the administrator casts the deciding vote. No prizes for guessing how that vote will be cast.

Where the outcome relating to a DOCA is determined by the exercise of the administrator’s casting vote, any creditor may apply to the court for a review of the outcome and appropriate order. Thus it is best to have the DOCA approved by a majority by value (secured creditors) and number (employees). Deloitte and Bain understand this - where do you think their efforts will be focussed over the next month?

With respect to legal action, yes, that's always a recourse - whether the action has any merit or not is an entirely different matter (see rejection of recent Broad Peak/Tor application to the Federal Court).


Originally Posted by Lead Balloon View Post
Yes, I think Mick overstated the effect of Middleton J's decision.
Yes, 'unequivocally' might have been a bit strong. The point though is that the court rejected the application by Broad Peak Investment and Tor to be granted access to the details of the Bain bid and Justice Middleton awarded Deloitte and Bain costs. The bottomline is that the bondholders have no special entitlement to information above that of any other creditor. ​​​​​​

In terms of sharing information, the administrator needs to ensure that the creditors have sufficient information regarding the state of the business and a recommendation on a DOCA to cast a considered vote at the second creditors' meeting. That information is typically circulated a week or so ahead of the meeting.
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Old 12th Jul 2020, 00:08
  #654 (permalink)  
 
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Originally Posted by Sunfish View Post
Mick, with respect, the corporations law is almost as opaque as CASA regulations. You are assuming a clarity that does not exist. If the law was as you say it is, the bond holders would not be investing hundreds of thousands of dollars (and potentially millions) in court action. The bond holders are not noted for being stupid, nor are they noted for throwing good money after bad. Section and Blackout have both noticed this.



I know they are unsecured, that is not the point. They are entitled to their share of the value realised. The question they are asking is has this value been maximised? Bain and Deloittes won’t tell. Furthermore, there is the question of some unsecured creditors being more equal than others.



I have perhaps $100 million experience in dealing with Macquarie, BT and major “venture” players in this country and I still have the mental scars from it. These people will sell their own grandmothers.There is no dirty trick too low for them to use. The public school accents and nice suits have obviously fooled you.

‘’Regarding “of the same class”, DOCA, etc, you didn’t understand what I wrote. What I am trying to explain is that it is not as simple as signing a DOCA and starting again.

For example if Virgin defaults, 2 billion in bonds go up in smoke, it gets sold for peanuts to Bain, Bain or the Federal Government loan Virgin money to continue and Virgin pays interest on that money. That means that virgin could have made a deed of arrangement with its creditors and thus the bonds didn’t need to be extinguished.

The bond holders do have rights, they have a right to go through the proposed deal with a fine tooth comb and the FACT THAT BAIN AND DELOITTES WONT LET THEM, Tells me all I need to know.

‘Get it through your head that this is a wrestling match with no rules, not a simple yes/no transaction.
We will see what the outcome is next month. Let's just park it until then.
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Old 12th Jul 2020, 00:13
  #655 (permalink)  
 
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No Mick. "Unequivocally" was unequivocally the wrong adverb to use. Middleton J effectively said to the parties: Go away and sort this information sharing issue out, or I will.

However, I know where my money would be, if I were silly enough to bet out the eventual outcome.
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Old 12th Jul 2020, 00:32
  #656 (permalink)  
 
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Call me stupid but why would Bain be prepared to put up over $600 million as an immediate injection along with presumably $20-50 million so far in costs of getting the process to here if they weren’t somewhat assured of taking over the company? I know that amount of money is probably loose change to these people but I’m guessing they don’t get that cash back if it falls over.

Big business isn’t my area but doesn’t it defy logic and fiscal sense to pump that much cash into something you “might” own?

If the administrator had the cash to run a skeleton operation (But not ramp up) until the approval of any deal, why didn’t Bain just wait until then to inject the cash. Is it simply about being able to ramp up and protect their possible investment for down the track and $600 million is just the cost of doing that?

Last edited by Boeingpilot738; 12th Jul 2020 at 00:46.
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Old 12th Jul 2020, 01:02
  #657 (permalink)  
 
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Originally Posted by Lead Balloon View Post
No Mick. "Unequivocally" was unequivocally the wrong adverb to use. Middleton J effectively said to the parties: Go away and sort this information sharing issue out, or I will.

However, I know where my money would be, if I were silly enough to bet out the eventual outcome.
The matter that was being addressed was whether the bondholders, either as a special group of creditors or as unsuccessful bidders, have some special entitlement to access information that is restricted by a court order. Sunfish was of the opinion that bondholders have a right to dissect the full and complete details of the sale agreement. That particular matter was resolved - unequivocally. They do not have that entitlement.

In terms of there being any doubt as to the court's ruling against the applicants, was there any? The application was refused, with costs, save paragraph 5 which simply related to the provision of notice of any further applications to the Court.

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Old 12th Jul 2020, 01:14
  #658 (permalink)  
 
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Originally Posted by Boeingpilot738 View Post
If the administrator had the cash to run a skeleton operation (But not ramp up) until the approval of any deal, why didn’t Bain just wait until then to inject the cash. Is it simply about being able to ramp up and protect their possible investment for down the track and $600 million is just the cost of doing that?
You've essentially answered your own question. Back at the start of the month the administrator filed an affidavit that included the following statement:

I presided at a meeting of the Committee of Inspection held on 1 July 2020 at 11am. At the meeting, I informed the Committee of Inspection that the Administrators had caused the Virgin Companies to enter into a facility to fund the ongoing administration and had granted security to support that borrowing.
In other words, the administrator had to borrow money to sustain the ongoing operations of the business. It's an undisclosed sum but rumoured to have been $500 - $600 million. Deloitte had guaranteed that loan.

A cash injection to cover the loan amount was almost certainly a requirement for a compliant proposal. That's the Bain cash injection.
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Old 12th Jul 2020, 01:17
  #659 (permalink)  
 
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Originally Posted by Boeingpilot738 View Post
If the administrator had the cash ..........
The 'if' bit, would seem to be the problem/and has been for the whole journey (hence, the events of the process)- the show did not have the endurance to traverse the process/administration, apparently........

rgds
S28- BE

Last edited by Section28- BE; 12th Jul 2020 at 01:26. Reason: sorry, 'Mick' has it covered/nailed- shall leave it here....
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Old 12th Jul 2020, 01:51
  #660 (permalink)  
 
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Originally Posted by Sunfish View Post
<snip>
Pari Passu means that all members of the same class of creditor have to be treated EQUALLY. That also extends through time. If that were not the case, companies could finance themselves forever by defaulting on their current debt and then taking on new debt, then defaulting, rinse and repeat.

The practical market for defaulted bonds revolves around buying worthless national bonds and then, when the country tries to borrow more from the IMF, world bank, etc. sticking it to them to pay out their existing bonds before they can borrow again. Patient traders make lots of money this way.
<snip>
DIGRESSION ALERT
Only read this article if the words Trump, China & Bonds interest you. Slightly relevant to this story only.
https://www.bloomberg.com/news/artic...que-china-debt




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