Sunday , July 12 2020
Home / Business / Canadian funds giant Brookfield makes 11th hour bid for Virgin Australia

Canadian funds giant Brookfield makes 11th hour bid for Virgin Australia

Administrator Deloitte will now have to decide whether to accept Brookfield’s bid as a separate offer to put to creditors, or whether it can reopen the formal sale process in which there are four other bidders. Sources close to Brookfield said the fund is confident Deloitte will take its proposal seriously.

A source close to one of the four other bidders said any move by Deloitte to let Brookfield back into the formal sale process would almost certainty be met with legal action by the shortlisted bidders, who are spending millions of dollars working on their bids.

“It would just be ridiculous,” the source said.

The Canadian giant had concerns about Virgin’s cash balance and whether the complex sale process could be completed in time with more than two parties allowed through to the second round of the sale. These concerns still need to be addressed for it to fully re-engage in the sale, sources said.

Unions representing Virgin’s workers have viewed Brookfield as a favourable suitor, especially compared to the private equity groups who they fear could be “cut-and-run” investors. “Brookfield is a serious bidder and does have a track record around the world of staying with infrastructure assets for a long period of time,” said Transport Workers Union national secretary Michael Kaine.


“We think it’s positive to have this serious bidder in the mix.”

Deloitte is expected to whittle down the four formal bidders to a shortlist of two over the weekend. Virgin went into voluntary administration in April with debts of $6.8 billion. Bids for the airline have been speculated to be around $3.5 billion to $4 billion.

Vastly different visions for the future of Virgin have emerged between the leading bidders.

Cyrus Capital, which has a history of investing in airlines alongside Virgin co-founder Richard Branson, intends to maintain Virgin Australia as a full-service international carrier competing with Qantas.

About admin

Check Also

Better, faster, stronger: TPG brings benefits to Vodafone users on day one

Vodafone customers can expect an increase in their mobile network speeds as the $15 billion …