20 buyers now circling Virgin Australia
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If I knew Bains exit strategy I would. However I’m afraid, based on overseas experiences, that it is not beneficial to anyone but Bain, although no doubt it will be perfectly legal as are all their actions. The secrecy surrounding their offer suggests it.
‘What I am trying to explain is that the types of behaviour that manifest themselves in these deals is what I would term “non empathetic “ to an extreme. This is because people’s behaviour changes when they stand to make a real fortune out of manipulating you and your situation. They have no compunction whatsoever about destroying you and your career.
The American exit strategy is to strip the remaining cash out of the business, load the company to the rafters with debt and then flog it to the stock market. The resulting mess then falls apart to
the dismay of staff, investors, creditors the public and the government AGAIN.
‘What I am trying to explain is that the types of behaviour that manifest themselves in these deals is what I would term “non empathetic “ to an extreme. This is because people’s behaviour changes when they stand to make a real fortune out of manipulating you and your situation. They have no compunction whatsoever about destroying you and your career.
The American exit strategy is to strip the remaining cash out of the business, load the company to the rafters with debt and then flog it to the stock market. The resulting mess then falls apart to
the dismay of staff, investors, creditors the public and the government AGAIN.
Please dont confuse the sheeple on Workplace with those that are on here. Certainly didnt show my Virgin designed nails yesterday. No gushing, loving comments to management from me and most other flight crew on there either.
I know Sunfish is trying to minimise the damage and blow by warning us. But I have no doubt his final statement in all this will be "I told you so".
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Servo, B738, Sunfish and your colleagues, I’m sure no one here (except the most twisted Fu€£s) will tell you I TOLD YOU SO , it’s just a far too serious a situation that you guys & girls find yourself in. The bare truth is that any one of us could find ourselves in your situation, after all we took the first ticket we could get beit TAA, Ansett or QANTAS in my day or the choices you had to be where you are today.
As I’ve said before, if VR is still on the table, I hope you can avail yourselves of it. Put a portion of that to one side of you can (mortgage in MEL/SYD, kids in school...I hear you) and keep your Medical & MECIR current and when this virus runs its course you’ll ALL be ready to get back on the horse again. Time has run out for blokes in their late 50s, like me, but you fellas that are a decade or more younger will be the senior,experienced pilots of the next upturn.
Hang in there.
As I’ve said before, if VR is still on the table, I hope you can avail yourselves of it. Put a portion of that to one side of you can (mortgage in MEL/SYD, kids in school...I hear you) and keep your Medical & MECIR current and when this virus runs its course you’ll ALL be ready to get back on the horse again. Time has run out for blokes in their late 50s, like me, but you fellas that are a decade or more younger will be the senior,experienced pilots of the next upturn.
Hang in there.
MacTrim, nice sentiment but please don't get confused by Sunfish that he has any skin in this game. I'm sure that you have come across the expression FIGJAM and that is what applies to Sunfish. Think of those occasions at a party where there has been someone a bit too loud who is regaling all and sundry with his flying experiences and what its like to be a pilot only to find out he is a clerk with a PPL. There are a lot of good people at Virgin who are going through a world of pain watching their world implode, Sunfish is not one of them. I have been through a similar situation but thankfully not this time.
Mactrim, how can you advise VR, when no facts are available on what the final numbers are. NB VR is suicidal in this situation as rehire from GDOJ will be well beyond the 5 years. VR = CR on the NB.
As I’ve said before, if VR is still on the table, I hope you can avail yourselves of it.
Don't forget the flip side of that decision is that if it all holds together you are out on the street whilst all your mates are still employed.
The American exit strategy is to strip the remaining cash out of the business, load the company to the rafters with debt and then flog it to the stock market. The resulting mess then falls apart to
the dismay of staff, investors, creditors the public and the government AGAIN.
the dismay of staff, investors, creditors the public and the government AGAIN.
Lookleft is right, I don’t have any skin in the game. However I have enough empathy not to want to see anyone get a taste of some of the crap that is going to be fed to the Virgin staff, and as a taxpayer and Australian, I don’t want to see the general public and the taxpayer screwed either. That is why I am suggesting that you cannot be too cynical about what is happening. Particularly since Bains strategy has been so secretive.
As for asset stripping, there is plenty to strip. The main asset is the simply huge cash flow that airlines generate, not the actual profit. Any financier will walk over broken glass to get at that. Then there are all the leasing arrangements. They can all bear a small overhead fee as well. That’s the name of the game these days - fees.
Bain could channel all leases through a company it owns (in the cayman islands?) and take a nice percentage. Then flog the airline as a. good news story, sell the leasing business and walk away..
As for asset stripping, there is plenty to strip. The main asset is the simply huge cash flow that airlines generate, not the actual profit. Any financier will walk over broken glass to get at that. Then there are all the leasing arrangements. They can all bear a small overhead fee as well. That’s the name of the game these days - fees.
Bain could channel all leases through a company it owns (in the cayman islands?) and take a nice percentage. Then flog the airline as a. good news story, sell the leasing business and walk away..
The main asset is the simply huge cash flow that airlines generate
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$800 million capitalisation under the plan. Are the bondholders still thinking they can go through this, even when Bain's holding a binding agreement.
https://www.smh.com.au/business/comp...13-p55lbp.html
https://www.smh.com.au/business/comp...13-p55lbp.html
Bain could channel all leases through a company it owns (in the cayman islands?) and take a nice percentage. Then flog the airline as a. good news story, sell the leasing business and walk away..
And further to your observation that there is currently no cash flow, it's actually worse than that. Because of the decision to honour all of the travel credits that had been issued in lieu of refunds, the business will very likely have a negative to very low positive cash flow for the next twelve to eighteen months.
As to all this hoopla about Bain’s secret plans, I would have thought that their plan was blazingly obvious. Acquire the business at the right price, prop it up while knocking it into proper shape (that is, rework the debt, shed anything that doesn't make money whether it's a route or an entire business unit, get the cost base under control and try to instil an outcomes driven business focus), book at least a year's worth of solid underlying earnings and then refloat it. It is by necessity a medium term plan. This was never going to be an in-and-out.
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ex: FEDERAL COURT OF AUSTRALIA (FCA) on 11/08/2020- Transcript.......
(Bolding)
Yes, they are very much of that view, and are in the Federal Court on that very matter, it was adjourned on Tuesday 11 August- before Justice Middleton.
Transcript here: https://www.fedcourt.gov.au/__data/a...4-20200811.pdf
To reconvene- Monday, 17 August at 11:15 (AEST)- with regard to the Bondholders access to (/or lack thereof...) information, stakeholders and facilitation for the assembly of a (second) Deed of Company Arrangement (DOCA), to be presented at the Second Creditors Meeting (where, a DOCA must be adopted/passed by that meeting in Number of Votes and Value).
The Court is receiving 'Submissions' from the involved parties in the interim.
Bondholders have also, made application for the appointment by the court of a formal 'Facilitator'.
'Mention' was also made- as to the possibility of having to extend out the timeline for the Second creditors meeting, based on where the process is at and what needs to occur, prior that meeting.
Also, the Wells Fargo/engines, etc. matter shall follow this one at 14:15 on 17 August.
Could be wrong, but- that was my quick read of it, there are 31 pages of it......
rgds all
S28- BE
$800 million capitalisation under the plan. Are the bondholders still thinking they can go through this, even when Bain's holding a binding agreement.
https://www.smh.com.au/business/comp...13-p55lbp.html
https://www.smh.com.au/business/comp...13-p55lbp.html
Transcript here: https://www.fedcourt.gov.au/__data/a...4-20200811.pdf
To reconvene- Monday, 17 August at 11:15 (AEST)- with regard to the Bondholders access to (/or lack thereof...) information, stakeholders and facilitation for the assembly of a (second) Deed of Company Arrangement (DOCA), to be presented at the Second Creditors Meeting (where, a DOCA must be adopted/passed by that meeting in Number of Votes and Value).
The Court is receiving 'Submissions' from the involved parties in the interim.
Bondholders have also, made application for the appointment by the court of a formal 'Facilitator'.
'Mention' was also made- as to the possibility of having to extend out the timeline for the Second creditors meeting, based on where the process is at and what needs to occur, prior that meeting.
Also, the Wells Fargo/engines, etc. matter shall follow this one at 14:15 on 17 August.
Could be wrong, but- that was my quick read of it, there are 31 pages of it......
rgds all
S28- BE
Spot on. Just to be clear, while Scurrah had tried to talk it up when releasing the first half results in February, Virgin's free cash flow wasn't stellar. At less than 6 per cent, for an airline (where essentially all your revenue comes weeks to months ahead of expenditure), it was actually pretty ordinary.
And further to your observation that there is currently no cash flow, it's actually worse than that. Because of the decision to honour all of the travel credits that had been issued in lieu of refunds, the business will very likely have a negative to very low positive cash flow for the next twelve to eighteen months.
As to all this hoopla about Bain’s secret plans, I would have thought that their plan was blazingly obvious. Acquire the business at the right price, prop it up while knocking it into proper shape (that is, rework the debt, shed anything that doesn't make money whether it's a route or an entire business unit, get the cost base under control and try to instil an outcomes driven business focus), book at least a year's worth of solid underlying earnings and then refloat it. It is by necessity a medium term plan. This was never going to be an in-and-out.
And further to your observation that there is currently no cash flow, it's actually worse than that. Because of the decision to honour all of the travel credits that had been issued in lieu of refunds, the business will very likely have a negative to very low positive cash flow for the next twelve to eighteen months.
As to all this hoopla about Bain’s secret plans, I would have thought that their plan was blazingly obvious. Acquire the business at the right price, prop it up while knocking it into proper shape (that is, rework the debt, shed anything that doesn't make money whether it's a route or an entire business unit, get the cost base under control and try to instil an outcomes driven business focus), book at least a year's worth of solid underlying earnings and then refloat it. It is by necessity a medium term plan. This was never going to be an in-and-out.
Virgin machinations won’t change a thing
By JOHN DURIE, SENIOR WRITER/COLUMNIST
8:28AM AUGUST 13, 2020
The Virgin bond holders have effectively split into two camps - the retail holders and the financial holders - with the latter now fighting an ultimately unwinnable fight.
Voluntary administrator Vaughan Strawbridge has the right to sell the company to whomever he thinks will be positioned for all creditors.’
The fight over which deed of company arrangement wins the day at the October 6 creditors meeting is a sham, because the assets have already been sold to Bain.
The alternative bid says lets vote the issue at the meeting. But what happens if the first vote is to approve the Bain DOCA?
Granted that creditors should know about the second offer before voting on the first, but you can’t have two votes passing control of the same asset.
The financial bond holders are said to be running around looking for a new backer to add financial muscle to their bid.
Even if that happened, the process is doomed because the sale has already been made and the creditors vote is a sham.
The bond holders are simply making noise in the hope of getting a better deal to keep them quiet.
That much is known to Bain and Strawbridge, and once that is more widely known the bond holder bargaining position is weakened.
It would surprise if Federal Court Judge Justice John Middleton did anything but rubber stamp Strawbridge’s actions.
By JOHN DURIE, SENIOR WRITER/COLUMNIST
8:28AM AUGUST 13, 2020
The Virgin bond holders have effectively split into two camps - the retail holders and the financial holders - with the latter now fighting an ultimately unwinnable fight.
Voluntary administrator Vaughan Strawbridge has the right to sell the company to whomever he thinks will be positioned for all creditors.’
The fight over which deed of company arrangement wins the day at the October 6 creditors meeting is a sham, because the assets have already been sold to Bain.
The alternative bid says lets vote the issue at the meeting. But what happens if the first vote is to approve the Bain DOCA?
Granted that creditors should know about the second offer before voting on the first, but you can’t have two votes passing control of the same asset.
The financial bond holders are said to be running around looking for a new backer to add financial muscle to their bid.
Even if that happened, the process is doomed because the sale has already been made and the creditors vote is a sham.
The bond holders are simply making noise in the hope of getting a better deal to keep them quiet.
That much is known to Bain and Strawbridge, and once that is more widely known the bond holder bargaining position is weakened.
It would surprise if Federal Court Judge Justice John Middleton did anything but rubber stamp Strawbridge’s actions.
Last edited by MickG0105; 13th Aug 2020 at 05:37. Reason: Formatting
Voluntary administrator Vaughan Strawbridge has the right to sell the company to whomever he thinks will be positioned for all creditors.’
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The vote is not on whether the business should be sold to Bain - that has happened under the administrator's rights under section 437A (437A allows an administrator to act unilaterally to sell the company's business without reference to the creditors).
What the creditors are voting on is:
What the creditors are voting on is:
- whether to accept the DOCA prepared by Bain,
- take the business out of administration, or
- liquidate it.
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S28- BE
Last edited by Section28- BE; 13th Aug 2020 at 10:13. Reason: 'Clarity'- have a crack at the 31x pages, as Mr Blackout says/alludes- 'it'll' cook your head...
“knock virgin into proper shape” do you mean to survive as a sustainably profitable airline or as a quick listing on the stock exchange?
We will see what the courts say about legalities. Probably Bain will win and the Virgin deal will never see the light of day, like the 150% R&D allowance scam and the sale of Ansetts DC9’s to Evergreen.
We will see what the courts say about legalities. Probably Bain will win and the Virgin deal will never see the light of day, like the 150% R&D allowance scam and the sale of Ansetts DC9’s to Evergreen.