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Virgin cash fears as airline down to its last $100m, Twiggy Forrest makes bid

Shortlisted bidders will be able to talk to Virgin’s existing management, aircraft lessor, airports and unions to put together their own business plans and make binding rescue bids by June 12.

Mr Strawbridge said he remained confident of securing a new owner by the end of June, which will go to a vote of creditors in mid-August. However, there are growing concerns about Virgin’s remaining liquidity and whether it can last until August, according to sources close to two of the leading bidders and one major creditor, who spoke on the condition of anonymity to discuss the confidential matters.

Deloitte confirmed on Friday the airline had $100 million in unrestricted cash thatwould last at least until mid-June. After that, the cash required until a new owner takes control in August would depend on their plan to restart the airline from its pandemic hibernation.

“There will be a future funding requirement but that’s not here, that’s not now – it is something that we are working through,” Mr Strawbridge said in an interview with this masthead.

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“The business was after funding prior to our appointment. There are options around additional liquidity, we haven’t had to push the button on any of those at this point but we do have options.”

Mr Strawbridge said options to raise more cash included funding from banks, bidders or even government support, noting that the Queensland government had offered financial support funding for Virgin before it collapsed last month.

Virgin collapsed in April with debts of almost $7 billion after the COVID-19 pandemic forced it to ground almost its entire fleet and cut off new sources of revenue.

The $US515 billion ($798 billion) Canadian asset manager Brookfield has discussed a joint bid with Queensland state-owned investment powerhouse QIC, which has been mandated to inject $200 million to $300 million to ensure Virgin’s headquarters remain in Brisbane. QIC ruled out bidding alone on Friday.

Melbourne private equity firm BGH Capital has teamed up with Australia’s largest superannuation fund, AustralianSuper, for its bid.

The $US105 billion ($165 billion) US firm Bain Capital is bidding alone with advice from former Jetstar chief executive Jayne Hrdlicka and restructuring experts KordaMentha, which managed the Ansett insolvency two decades ago.

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