20 buyers now circling Virgin Australia
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If the prospective new buyer(s) of Virgin need as much government support and guarantees that the Administrator is pleading for, I’d suggest the Virgin resurrection isn’t looking great!
Dead man walking!
Dead man walking!
As has just been reported by GT on Sky, IF Bain or Cyrus and Co's can come to the table with $AUD 100B, then surely they can't seriously be asking for government handouts and guarantees........
The Adaministrators will be the ONLY winners out of this debacle.
Akin in to a train wreck in slow motion.
The Adaministrators will be the ONLY winners out of this debacle.
Akin in to a train wreck in slow motion.
KordaMentha are a different beast these days. Why do you suppose KM was recruited by Bain? I can tell you it was for Union relations above all other restructuring advice as Bain knew they had problems in this area. Don’t get me wrong, their relationship is with union secretaries and Presidents and not employees...they just want the creditor votes. They hope to discredit the Cyrus bid and get said Unions to agree they (Bain) have a more sustainable path forward.
People are entitled to their dislike of a company. History cannot be rewritten. However, KordoMentha’s involvement contradicts the intent of your post at least from Bain’s perspective.
Furthermore, it appears both Bain and KM have a similar vision for Virgin II. So the KM debacle might be what’s implemented anyway.
Off to get my bullet proof vest.
People are entitled to their dislike of a company. History cannot be rewritten. However, KordoMentha’s involvement contradicts the intent of your post at least from Bain’s perspective.
Furthermore, it appears both Bain and KM have a similar vision for Virgin II. So the KM debacle might be what’s implemented anyway.
Off to get my bullet proof vest.
Last edited by crosscutter; 10th Jun 2020 at 06:47.
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100B are sure that number is right that's 100 plus 9 naughts divide that by 150m you get 666 B787s.
All the reports in the media have no bearing on reality.
All the reports in the media have no bearing on reality.
Starting to smell like Tesna all over again. When Fox and Lew were going to do wonders by buying Ansett until the final hurdle when they wanted all sorts of government guarantees to ensure the taxpayer would carry any loss they might incur on memory. When that was not forth coming they walked.
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Starting to smell like Tesna all over again. When Fox and Lew were going to do wonders by buying Ansett until the final hurdle when they wanted all sorts of government guarantees to ensure the taxpayer would carry any loss they might incur on memory. When that was not forth coming they walked.
Debt of $5.5B becoming 7.5B and counting, into an uncertain market due covid, an aggressive multi tiered competitor who will draw their 'line in the sand" and protect it to the death.
I hope the pleading for assistance/relief is just standard ops 101 and someone can go forward - probably hoping ****loads of $$ will fix all the ills and reap a golden ROI.
Good luck with that - it is aviation after all, for too many an investment graveyard. Sure these guys have it sussed out!
Don't disagree at all. You can't have those that spruke the virtues of the free enterprise system, minimizing taxation by sending profits offshore while demanding no government interference when things are good ,then put there hand out for taxpayer funds , protection etc when things go bad.
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ex the AFR: Morrison defiant as Deloitte warns Virgin sale could fail.
Given, the subsequent Media-Cycle and events of today/the last 36hrs..............., this 'one' raises 'some' interesting (only an 'opinion')- stuff......
Referenced/Article link here (bolding): https://www.afr.com/companies/transp...0200610-p5513x
Extract here:
Rgds all
S28- BE
Referenced/Article link here (bolding): https://www.afr.com/companies/transp...0200610-p5513x
Extract here:
-Updated
Prime Minister Scott Morrison has slapped down a plea for extended JobKeeper support for Virgin Australia after the stricken airline's administrators Deloitte warned that its sale may still fail without further government intervention.
The administrators' concerns over JobKeeper come as the government looks to scale back the program. AAP
In a letter to Mr Morrison, Deputy Prime Minister Michael McCormack, Treasurer Josh Frydenberg and Finance Minister Mathias Cormann, Deloitte said bidders Bain Capital and Cyrus Capital Partners could withdraw without more certainty around financial support.
The administrators primarily wanted clarity on the future of the JobSeeker wage subsidy program as the government looks at winding it back, but also proposed a guarantee on Virgin's ticket sales and other measures.
Without this support, Deloitte Partner and lead administrator Vaughan Strawbridge warned in the letter that the ability for the bidders to launch binding offers by the June 22 deadline would be significantly more limited.
But Mr Morrison rejected the suggestion that JobKeeper be extended for Virgin, saying the best medicine for the airline was for it to start flying again.This, the Prime This, the Prime Minister said, would require the states to meet their collective commitment to relax all interstate travel bans by July, under the three-stage lifting of restrictions agreed to by the National Cabinet on May 8.
"If we're concerned about Virgin employees ... it is very important that we open up the domestic borders in this country,'' he said.
"We need to get planes flying around Australia and if you want to see planes flying around Australia ... we need to open up these domestic borders."
Mr Morrison had aimed his comments at South Australia, Tasmania, Queensland and Western Australia.
"That is in Virgin's interests. It is in Qantas' interests. It's in the aviation sector's interest that we move to opening up travel in Australia as soon as possible."
Neither Bain or Cyrus would comment on Wednesday.
When asked whether it remained committed to launching a bid for the airline if further government support was not forthcoming, Bain directed The Australian Financial Review to previous statements.
The private equity firm and its local managing director, former Olympic diver Mike Murphy, emphasised Bain's strong capital base and desire to be a long-term partner for a relaunched Virgin late last month.
Mr Strawbridge confirmed he had written to the government while not divulging the specifics.
"We are entirely comfortable with the process we have in place and the sale we are pursuing," he said. "Last night, we wrote to [the] government asking for clarification of their intentions regarding future and ongoing support for the aviation industry."
"It's important the bidders understand levels of government support, so they know how to structure their bids."
Mr Moore, former chief executive of Macquarie Group, was appointed the government's emissary to Virgin's administration when the airline tripped under a nearly $7 billion debt pile, a situation magnified by the COVID-19 pandemic, in April.
The first was JobKeeper. As the government looks to wind back the scale of the payment as the economy recovers from the pandemic, most notably through the early removal of childcare operators from the subsidy, Deloitte warned against doing the same for the aviation sector.
Deloitte warned such action could mean thousands of Virgin staff are hit with redundancies before a new owner takes the reins, potentially saddling either Bain or Cyrus with a significant unexpected bill and spooking them out of the race.
The administrators also said a guarantee on Virgin's ticket sales could renew consumer confidence in Virgin, luring travellers back to the airline despite fears of liquidation and staving off a sluggish relaunch.
Plus they asked for an extension to airport slot protection measures and a further continuation of the domestic aviation network support to the end of the year.
The government had already extended the latter to September 30 over the long weekend.
Deloitte asked the government to ensure the Australian Competition and Consumer Commission had the requisite powers to ensure a relaunched Virgin is not killed at birth by an aggressive rival in Qantas as well.
And they requested a commitment to a more equitable distribution of federal flight services tenders after Qantas raked in around $4.3 million in government contracts between 2017 and 2020.
In comparison, Virgin earned just $35,400 from the government over the same period.
The theory administrators put to the government were that such changes would shore-up Virgin's immediate future, so Bain and Cyrus were encouraged to stay in the race until the very end.
The letter emerged after Department of Infrastructure, Transport, Regional Development and Communications officials told parliament they had EY investigate Virgin's financial position after it first requested a $1.4 billion government loan in May.
The EY report informed the department's advice to the government on whether to provide a bailout or loan to Virgin.
Transport Workers' Union members also took to the lawns of Parliament House in Canberra to campaign for changes to the JobKeeper program on Wednesday, as some aviation companies were excluded from the subsidy due to their foreign ownership.
"This is a warning to this federal government – what's needed now is JobKeeper in aviation until the borders reopen," TWU national secretary Michael Kaine said.
"We need AviationKeeper because unless we get it, the aviation sector will crumble. There is a cliff coming in September; there are tens of thousands of jobs in aviation that will not be there in September if this government does not act."
Morrison defiant as Deloitte warns Virgin sale could fail.
Lucas Baird and Phillip Coorey Updated Jun 10, 2020 – 5.33pm, first published at 12.22pmPrime Minister Scott Morrison has slapped down a plea for extended JobKeeper support for Virgin Australia after the stricken airline's administrators Deloitte warned that its sale may still fail without further government intervention.
The administrators' concerns over JobKeeper come as the government looks to scale back the program. AAP
In a letter to Mr Morrison, Deputy Prime Minister Michael McCormack, Treasurer Josh Frydenberg and Finance Minister Mathias Cormann, Deloitte said bidders Bain Capital and Cyrus Capital Partners could withdraw without more certainty around financial support.
The administrators primarily wanted clarity on the future of the JobSeeker wage subsidy program as the government looks at winding it back, but also proposed a guarantee on Virgin's ticket sales and other measures.
Without this support, Deloitte Partner and lead administrator Vaughan Strawbridge warned in the letter that the ability for the bidders to launch binding offers by the June 22 deadline would be significantly more limited.
But Mr Morrison rejected the suggestion that JobKeeper be extended for Virgin, saying the best medicine for the airline was for it to start flying again.This, the Prime This, the Prime Minister said, would require the states to meet their collective commitment to relax all interstate travel bans by July, under the three-stage lifting of restrictions agreed to by the National Cabinet on May 8.
"If we're concerned about Virgin employees ... it is very important that we open up the domestic borders in this country,'' he said.
"We need to get planes flying around Australia and if you want to see planes flying around Australia ... we need to open up these domestic borders."
Mr Morrison had aimed his comments at South Australia, Tasmania, Queensland and Western Australia.
"That is in Virgin's interests. It is in Qantas' interests. It's in the aviation sector's interest that we move to opening up travel in Australia as soon as possible."
Neither Bain or Cyrus would comment on Wednesday.
When asked whether it remained committed to launching a bid for the airline if further government support was not forthcoming, Bain directed The Australian Financial Review to previous statements.
The private equity firm and its local managing director, former Olympic diver Mike Murphy, emphasised Bain's strong capital base and desire to be a long-term partner for a relaunched Virgin late last month.
Mr Strawbridge confirmed he had written to the government while not divulging the specifics.
"We are entirely comfortable with the process we have in place and the sale we are pursuing," he said. "Last night, we wrote to [the] government asking for clarification of their intentions regarding future and ongoing support for the aviation industry."
"It's important the bidders understand levels of government support, so they know how to structure their bids."
Mr Moore, former chief executive of Macquarie Group, was appointed the government's emissary to Virgin's administration when the airline tripped under a nearly $7 billion debt pile, a situation magnified by the COVID-19 pandemic, in April.
Redundancy concerns drive letter
The Financial Review understands there were six key points to the communication.The first was JobKeeper. As the government looks to wind back the scale of the payment as the economy recovers from the pandemic, most notably through the early removal of childcare operators from the subsidy, Deloitte warned against doing the same for the aviation sector.
Deloitte warned such action could mean thousands of Virgin staff are hit with redundancies before a new owner takes the reins, potentially saddling either Bain or Cyrus with a significant unexpected bill and spooking them out of the race.
The administrators also said a guarantee on Virgin's ticket sales could renew consumer confidence in Virgin, luring travellers back to the airline despite fears of liquidation and staving off a sluggish relaunch.
Plus they asked for an extension to airport slot protection measures and a further continuation of the domestic aviation network support to the end of the year.
The government had already extended the latter to September 30 over the long weekend.
Deloitte asked the government to ensure the Australian Competition and Consumer Commission had the requisite powers to ensure a relaunched Virgin is not killed at birth by an aggressive rival in Qantas as well.
And they requested a commitment to a more equitable distribution of federal flight services tenders after Qantas raked in around $4.3 million in government contracts between 2017 and 2020.
In comparison, Virgin earned just $35,400 from the government over the same period.
The theory administrators put to the government were that such changes would shore-up Virgin's immediate future, so Bain and Cyrus were encouraged to stay in the race until the very end.
Related
Virgin bondholders set to find their voice
The letter emerged after Department of Infrastructure, Transport, Regional Development and Communications officials told parliament they had EY investigate Virgin's financial position after it first requested a $1.4 billion government loan in May.
The EY report informed the department's advice to the government on whether to provide a bailout or loan to Virgin.
Transport Workers' Union members also took to the lawns of Parliament House in Canberra to campaign for changes to the JobKeeper program on Wednesday, as some aviation companies were excluded from the subsidy due to their foreign ownership.
"This is a warning to this federal government – what's needed now is JobKeeper in aviation until the borders reopen," TWU national secretary Michael Kaine said.
"We need AviationKeeper because unless we get it, the aviation sector will crumble. There is a cliff coming in September; there are tens of thousands of jobs in aviation that will not be there in September if this government does not act."
S28- BE
Last edited by Section28- BE; 10th Jun 2020 at 10:24. Reason: Get 'it' Correct/Right- or Flamed!!!!!.... rgds All
Government will, predictably say no. VC’s try this all the time. Since QF no longer has any engineering capability and VB never developed it, neither company can be argued as being of “strategic national asset”; that would justify intervention.
QF closed down its overhaul and heavy maintenance operations, sold the equipment and retrenched the staff. VB never even built any engineering capacity. Line maintenance and simple checks is all there is. There used to be deep engine and component overhaul capability, but we outsourced all of it. I guess we can perhaps still retread tyres? Forget engine overhaul.
1st
QF closed down its overhaul and heavy maintenance operations, sold the equipment and retrenched the staff. VB never even built any engineering capacity. Line maintenance and simple checks is all there is. There used to be deep engine and component overhaul capability, but we outsourced all of it. I guess we can perhaps still retread tyres? Forget engine overhaul.
1st
Starting to smell like Tesna all over again. When Fox and Lew were going to do wonders by buying Ansett until the final hurdle when they wanted all sorts of government guarantees to ensure the taxpayer would carry any loss they might incur on memory. When that was not forth coming they walked.
It would not surprise me if it revealed that VAH was offered for $1 at some point to certain parties (*cough* SIA) in a rehash of NZ offering AN to SIA and QF for $1.
FFS Sunfish. Having an overhaul facility doesn’t determine a carrier’s value as a strategic asset, its the lift. Next time there’s a disaster abroad who do you call to repatriate Australians? GE or Rolls Royce?
The lack of overhaul facilities is a reflection of the engine builders' policies and controlling spares availability. Most airlines buy thrust by the hour and hence don’t need an in-house overhaul ability even if they could get parts support.
The lack of overhaul facilities is a reflection of the engine builders' policies and controlling spares availability. Most airlines buy thrust by the hour and hence don’t need an in-house overhaul ability even if they could get parts support.
Repatriation flights are over stated in my option.. Sure QF supplied a couple but the most flights were supplied by others. Qatar, was one of the more common but into Adelaide for example were charted flights from Indonesia bringing Indian Australians home .
All the sophisticated services that backed them up - surface treatment (plating, heat treatment, shot peen, large X-ray/ndt, etc) are gone too for anything larger than a King Air. I guess QF still would have some contractor doing tyres wheels and brake packs.
‘’As for engines, forgettaboutit. We don’t even have a tip grinder anymore.
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The employees, by virtue of numbers, can block any proposed Deed of Company Arrangement. They are the only creditor grouping with that power. Don't think for a moment that the unions do not understand that. They will have a big say in terms of which way this swings. Why do you think BGH were handed their hat?
Pinnacle Airlines in the US. They emerged from Chapter 11 as Endeavour Air.
The brand would not be in the top 4 reasons for trying to resurrect VA leave alone being the primary reason. You only need to ask the question, 'Everything else being equal, if it wasn't called Virgin Australia would there be as much interest?'
Pinnacle Airlines in the US. They emerged from Chapter 11 as Endeavour Air.
The brand would not be in the top 4 reasons for trying to resurrect VA leave alone being the primary reason. You only need to ask the question, 'Everything else being equal, if it wasn't called Virgin Australia would there be as much interest?'
Endeavor is an amalgam of Colgan Air, Mesaba & Pinnacle.-you might also look at American Eagle, post bankruptcy 3 different wholly owned AA regionals...
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I'm not convinced that a buyer would see it as an asset.
Are these guys (Deloitte, Bain, Cyrus, et al) for real!
They cry about the destruction of the market, uncertainty about Jobkeeper, and concerns about ticket sales, just to mention a few. Hello Macfly!
Maybe these obscenely paid wheeler and dealer types should go back to whatever business schools they graduated from and request their course fees back.
They cry about the destruction of the market, uncertainty about Jobkeeper, and concerns about ticket sales, just to mention a few. Hello Macfly!
Maybe these obscenely paid wheeler and dealer types should go back to whatever business schools they graduated from and request their course fees back.