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20 buyers now circling Virgin Australia

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20 buyers now circling Virgin Australia

Old 2nd Aug 2020, 11:28
  #701 (permalink)  
 
Join Date: Aug 2018
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Hello Bain, anyone home?

Surely a world savvy and experienced outfit would have considered the possibility, no probability of a second wave, third wave, spike or whatever that would effectively put an already hibernating market into a coma!

Or will they simply do what Gordon Gecko tried to do to Bluestar?
Unlike Bluestar, which was reference to Carl Icahn's job on TWA, I don't think there would be much to break up. It would be more a case of just walking away and liquidating the airline, where everyone gets zero except the staff who get paid by the government and secured creditors who get their assets.

However if they have deep pockets hanging on into next year might salvage something.



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Old 2nd Aug 2020, 12:06
  #702 (permalink)  
 
Join Date: Aug 2004
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I say again; What is Bains exit strategy?
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Old 2nd Aug 2020, 12:25
  #703 (permalink)  
 
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Originally Posted by Sunfish View Post
I say again; What is Bains exit strategy?

And will they have the same exit strategy that they had 5wks ago.
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Old 2nd Aug 2020, 12:30
  #704 (permalink)  
 
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Originally Posted by Sunfish View Post
I say again; What is Bains exit strategy?
I doubt anyone here really knows, do you?
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Old 2nd Aug 2020, 12:59
  #705 (permalink)  
 
Join Date: Dec 2006
Location: australia
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Originally Posted by flamingmoe View Post
And will they have the same exit strategy that they had 5wks ago.
Unfortunately can't reference but always remember someone of note, after being questioned by a journalist about a change of stance on an issue responded:

" Well when circumstances change you have to assess, re-assess and reconsider your position; maybe your position has to change. What would YOU do?"

Suppose they might have the same exit strategy but the way things have changed unless they struck a deal with Deloittes with absolutely no downside for Bain what they walk in to (and pay for) will affect what they can sell out of, affecting their potential profit.

As with Bain it's about $$$ and NOT about the warm and fuzzies of operating aircraft I'm sure they're constantly looking at the viability of ANY investment.

Anyone who wants to believe it remains (if ever was) a "done deal" I hope for all involved you're proven correct.

Cheers



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Old 2nd Aug 2020, 23:51
  #706 (permalink)  
 
Join Date: Jul 2008
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The idea isn’t that post administration the airline has 70 aircraft flying....its more that the airline will have 70 aircraft available for it to ramp up operations over ‘x’ amount of months.
I think the number of aircraft Virgin retain will be solely dependant on how successful lease renegotiations were - the more ‘power by the hour’ leases they were able to renegotiate, the more aircraft there will be.
I find it very unlikely that Bain would fork out the money they have to buy an airline of 40 737s.My money is on 60-75 737s.....hoping for the latter, expecting something closer to the former.
So what you are saying is that Bain are so good at negotiation that they will have other entities wearing the cost of having 60-75 airframes available for the new Virgin? Who pays for the staff that are needed to support that fleet size or does Bain just bring them online as the aircraft are needed? Meanwhile the C19 impact on the economy just keeps rolling along and there is very limited flying available. It reminds me of the argument that everything Singapore Airlines touches turns to gold based on the fanciful premise that because they make bucket loads of money then anything they are involved in will. I ask the question again; When does Bain actually have to commit to the purchase? Then and only then, will the staff know if they have a job.
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Old 4th Aug 2020, 03:36
  #707 (permalink)  
 
Join Date: Jun 2019
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Hrdlicka’s role comes into sharp focus as Virgin prepares for a relaunch

The role that the former Jetstar boss Jayne Hrdlicka will play in the operation of Virgin Australia is increasingly coming under sharp focus, with a growing number of suggestions in the market that the highly regarded executive could have a hands-on position with the soon-to-be revamped airline.

Ms Hrdlicka worked at Bain Consulting before running the Qantas budget airline offshoot Jetstar and later A2 milk.

She has been working alongside Bain Capital in its efforts to buy Virgin Australia, as first revealed by DataRoom on April 23.

Earlier, it was thought that Ms Hrdlicka would likely emerge as chairman of Virgin Australia under Bain Capital’s ownership or a director, but now the thinking is that her expertise of operating an airline to a tight budget will be more fully utilised once Bain Capital secures control of the carrier following the creditors vote on August 26.

Her non-compete agreement with A2 Milk expired at the end of June.

In May, Bain Australia boss Mike Murphy told The Australian that the private equity firm hoped to keep working with Virgin Australia boss Paul Scurrah but added it was too early to determine who would play what role.

However, the thinking now is that with the tough COVID-19 restrictions in place in Victoria, Ms Hrdlikca’s role with the airline could be more prominent.

Ms Hrdlicka is seen as shrewd when it comes to operating airlines and is known to have ruffled feathers among union representatives when she drove down costs while running Jetstar.

But Bain Capital may be taking a harder look at ways to cut costs as part of efforts to survive the current environment where international travel is suspended and domestic travel is largely off limits for those not only from Victoria but also Sydney.

The Australian reported in July that a key union in the Virgin Australia administration was believed to be pushing new owner Bain Capital to guarantee that Ms Hrdlicka would not have a key role in running the airline following the private equity’s $1.65bn deal struck with voluntary administrator Vaughan Strawbridge to take control of the carrier after it collapsed in April.

She was recently appointed to the board of Hawaiian Airlines and is also chairman of Tennis Australia so some suggest perhaps her schedule is already full.

Bain has already injected about $125m of capital into the airline, which some say has lessened its negotiating power with certain creditors.

However, most now believe that the buyout fund has the deal sewn up and it will be difficult for the airline’s disgruntled bond holders that are owed about $2bn to derail the proposal.

A dilemma for some, such as aircraft lessors, is whether to be paid out as creditors or renegotiate with Bain ahead of the creditors meeting.

Bain or Virgin Australia management are yet to disclose exact details of the business plan under private equity ownership or the amount that will be paid out to the bond holders.

But there has been talk that Bain could offer an update for its Virgin Australia plans in the coming days. Bain is due to make its formal DOCA proposal to the administrator on August 12.

But the bondholders were not set to learn how much they will get until they are given a formal report by the administrators, scheduled on August 19, ahead of their meeting days after.
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Old 4th Aug 2020, 06:10
  #708 (permalink)  
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Originally Posted by Colonel_Klink View Post
The idea isn’t that post administration the airline has 70 aircraft flying....its more that the airline will have 70 aircraft available for it to ramp up operations over ‘x’ amount of months.
I think the number of aircraft Virgin retain will be solely dependant on how successful lease renegotiations were - the more ‘power by the hour’ leases they were able to renegotiate, the more aircraft there will be.
I find it very unlikely that Bain would fork out the money they have to buy an airline of 40 737s.
My money is on 60-75 737s.....hoping for the latter, expecting something closer to the former.s
One article said the idea was for Bain to be flying around 40 B737s but have more on hand so that if one goes tech they can swap in another because Bain's research said that OTP and reliability of schedule etc was super-important, and of course Bain would also be looking at how domestic travel and even NZ is going to come back but this will happen through to 2021, so they can't just settle for a 'baseline' fleet and then need to go out and lease more B737s every other month, especially the way that demand can do up and down as we've seen with MEL and now SYD.

I figured they would hang onto all the B737s they own, which is around 40 I think I read somewhere, and then add to this the best value leased B737 leased deals. As Virgin had probably that many leased B737s again and from a wide number of leasing firms they can probably shop around the leasing agents, maybe preference the newest B737s for greater reliability, and just cut the best deal to keep those extra B737s in the fleet, so maybe add another 10-20 to the 40 they own and they have a fleet of 60-70 all up.
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Old 4th Aug 2020, 08:55
  #709 (permalink)  
 
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It may be a buyers market as far as leasing goes, and probably will be for some time?

If Bain do plan on expanding the fleet down the track however, it still might be a good idea to form a positive relationship with the various lessors.

I wonder if that’s part of their strategy?
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Old 4th Aug 2020, 09:00
  #710 (permalink)  
 
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Press announcement tomorrow in regards to initial operational structure plans from Bain. Lounges yes. International Yes. Tiger No.

Media is reporting they are maintaining the full service model, not going after Jetstar, or cutting the product back as much as previously speculated.

Profitable core, just need to cut off all the excess baggage.
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Old 4th Aug 2020, 10:33
  #711 (permalink)  
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Just on the news here. Virgin to reduce staff by 4000. I hope it’s not true.
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Old 4th Aug 2020, 10:33
  #712 (permalink)  
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Originally Posted by wheels_down View Post
Press announcement tomorrow in regards to initial operational structure plans from Bain. Lounges yes. International Yes. Tiger No.
Media is reporting they are maintaining the full service model, not going after Jetstar, or cutting the product back as much as previously speculated.
Profitable core, just need to cut off all the excess baggage.
I'd have thought International NO, at least not until next year. Lounges, well nobody doubted they were going. Tiger, everyone know it was gone. But 'full service'? I can't see that, and nobody ever expected them to go after Jetstar. Honestly the media will not have seen anything 'leaked' at this stage, this is all just speculation, largely playing safe bets but also making some dumb predictions.
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Old 4th Aug 2020, 10:58
  #713 (permalink)  
 
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Originally Posted by MelbourneFlyer View Post
I'd have thought International NO, at least not until next year. Lounges, well nobody doubted they were going. Tiger, everyone know it was gone. But 'full service'? I can't see that, and nobody ever expected them to go after Jetstar. Honestly the media will not have seen anything 'leaked' at this stage, this is all just speculation, largely playing safe bets but also making some dumb predictions.
Thanks for the insight BNEA320
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Old 4th Aug 2020, 11:17
  #714 (permalink)  
 
Join Date: Jul 2007
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'Apparently'- ASX announcement, accompanied by Media spiel, tomorrow Wed- 05/08/2020.....

rgds
S28- BE

Last edited by Section28- BE; 4th Aug 2020 at 11:29. Reason: ex; the Australian.....
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Old 4th Aug 2020, 11:23
  #715 (permalink)  
 
Join Date: Aug 2009
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Just on the news here. Virgin to reduce staff by 4000. I hope it’s not true.


That is old news. Bain had quoted in the past that the headcount would reduce in line with the reduced fleet size. That number of 4k is on mark to what was discussed in previous interviews.
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Old 4th Aug 2020, 11:53
  #716 (permalink)  
 
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https://www.afr.com/street-talk/dela...0200804-p55ibq
Deloitte's Vaughan Strawbridge and his team have had control of Virgin Australia and its sale since April. Louise Kennerley

Street Talk can reveal Deloitte asked Virgin's Creditors Committee of Inspection, the formal creditor representative group, to push the second creditors meeting back one week to September 4 and give it more time to prepare the pre-meeting reports.

According to a confidential document seen by this column, Deloitte argued the delay would also give creditors more time to consider information ahead of their vote on the administrator recommended recapitalisation proposal lobbed by Bain Capital.

It also said delaying the meeting now meant it was less likely creditors would vote to adjourn the meeting at a later date, to give them more time to work through the deal materials.

It is understood creditors accepted the delay - and were told to expect Deloitte's detailed report on August 25, ahead of the vote on September 4.

Deloitte said the delay would also allow more time to negotiate key contracts as part of the restructure, give bondholder groups more time to consider their options, and give the administrator more time to prepare the comprehensive and complex report.

It comes as Bain - with the help of its advisers including KordaMentha, Goldman Sachs and Herbert Smith Freehills - prepare the proposed Deed of Company Arrangement, which is the formal legal document that would be put to Virgin creditors for their approval. The DOCA was due to be finalised in the coming week.

While Bain works through the paperwork, it would be keeping one eye on COVID-19 numbers and associated restrictions, which have curbed domestic and offshore travel and grounded most of Virgin's fleet. The sooner the travel market re-opens, the more likely Virgin could prove a shrewd investment for Bain.

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Old 4th Aug 2020, 12:46
  #717 (permalink)  
 
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International? As in 737 or 330/777/ATR? Does Tasmania count?

Maybe the EJets are coming back? Going halves with Alliance
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Old 4th Aug 2020, 21:58
  #718 (permalink)  
 
Join Date: Aug 2004
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I have a very bad feeling about “the deal”. My main concern now is that the Taxpayer and the general public don’t get rooted. I’m sorry for the staff.

One mystery is revealed; Goldman Sachs (aka the vampire squid) is working with Bain. That tells you where the money is from.

What I suspect has happened is that Deloittes have realised that the agreement they signed with Bain had barbed hooks all over it. They can’t back out. Bain gets to double its money even if the deal falls through (at deloittes and the creditors expense). Deloittes needs the extra time to see if they can somehow save themselves from this disaster or dress up this turd sandwich for the creditors.

I say again “what is Bains exit strategy?” no VC goes into a deal without having that decided because that’s the first question the Bain CEO asks: “how are we going to. get paid?”.

‘’The answer to that question may be rather unpleasant.
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Old 4th Aug 2020, 22:39
  #719 (permalink)  
 
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Originally Posted by Turnleft080 View Post
https://www.afr.com/street-talk/dela...0200804-p55ibq
Deloitte's Vaughan Strawbridge and his team have had control of Virgin Australia and its sale since April. Louise Kennerley

Street Talk can reveal Deloitte asked Virgin's Creditors Committee of Inspection, the formal creditor representative group, to push the second creditors meeting back one week to September 4 and give it more time to prepare the pre-meeting reports.

According to a confidential document seen by this column, Deloitte argued the delay would also give creditors more time to consider information ahead of their vote on the administrator recommended recapitalisation proposal lobbed by Bain Capital.

It also said delaying the meeting now meant it was less likely creditors would vote to adjourn the meeting at a later date, to give them more time to work through the deal materials.

It is understood creditors accepted the delay - and were told to expect Deloitte's detailed report on August 25, ahead of the vote on September 4.

Deloitte said the delay would also allow more time to negotiate key contracts as part of the restructure, give bondholder groups more time to consider their options, and give the administrator more time to prepare the comprehensive and complex report.

It comes as Bain - with the help of its advisers including KordaMentha, Goldman Sachs and Herbert Smith Freehills - prepare the proposed Deed of Company Arrangement, which is the formal legal document that would be put to Virgin creditors for their approval. The DOCA was due to be finalised in the coming week.

While Bain works through the paperwork, it would be keeping one eye on COVID-19 numbers and associated restrictions, which have curbed domestic and offshore travel and grounded most of Virgin's fleet. The sooner the travel market re-opens, the more likely Virgin could prove a shrewd investment for Bain.
I wouldn't be surprised if the Second creditors meeting gets pushed back even further, maybe towards end of September. Im pretty certain the renegotiation of contracts would be One of the 'significant number of steps' Bain needs to finalise with its 'conditional sale', before the sale transaction can be complete.

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Old 4th Aug 2020, 22:48
  #720 (permalink)  
 
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Sunfish, you’re a pest. I realise you were once 2IC in a paperclip factory so you’re now an oracle on business, but don’t come onto a pilot’s forum and say you’re concerned about taxpayers when a few hundred or thousand pilots are about to be taken out the back and shot.
Try to have just a tiny bit of human emotion.
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