Creditors of Virgin Australia have accepted the terms of purchase previously proposed by Bain Capital (BC), the company reports.
In a press release issued on September 4, 2020, Virgin Australia announced that its creditors have approved the investment firm’s Bain Capital proposal, as was recommended by the airline’s administrator Deloitte on August 25, 2020.
The deeds of company agreement (DOCAs) approved by creditors would provide 13 and 9 cents in the dollar on unsecured creditors’ claims from a cash pool of between AUD 462 ($336) and AUD 612 ($445) million.
At the same time, Bain Capital agreed to provide full value of all customer travel credits and prepaid flights post voluntary administration, continued employment of employees with entitlements paid in full, as well as aircraft and equipment maintenance and retention.
“While the outcome of the meeting today is a significant milestone for both the future of Virgin Australia and Australia’s aviation industry more broadly, we also acknowledge those loyal Virgin Australia Group employees who will lose their jobs and the difficulties that this will cause them and their families as well as the numerous suppliers and investors who will not receive all of the monies owed to them,” a statement by Virgin Australia reads.
After going into voluntary administration on April 21, 2020, Virgin Australia announced that 3,000 layoffs would follow. The airline also said it would get rid of its ATR-72s, Boeing 777s, and Airbus A330s from carrier’s fleet. Its low-cost subsidiary Tigerair Australia was also discontinued as a part of the deal.
According to the statement, the DOCAs would be signed within 15 business days counting from September 4, 2020. The full transfer of Virgin Australia’s shares would go through by October 31 of the same year.