We’ve been considering what the options are for potential additional funding should it be required,” Deloitte’s lead administrator said.

“We’ve been considering what the options are for potential additional funding should it be required and when would be the appropriate time,” he said.
“At this time, we’ve got enough to get through to our sale process, but we continue to revise that given what we can do around unlocking restricted cash in the group and also around managing the expenses.”
Asked whether this would mean Deloitte would have to approach one of Virgin’s 10,000 creditors for a bridging loan, or even approach the federal government for a guarantee on ticket sales, Mr Strawbridge was unclear.
“Before our appointment, the company had reached out for interim funding loans. We haven’t needed to do that to date,” Mr Strawbridge said. “We do have options, and we are considering those options.”
Rating agency Moody’s Investor Service downgraded the company’s credit to Ca on Monday, citing Virgin’s missed coupon payment to its bondholders on April 15.
Deloitte spent the weekend narrowing down the list of the best offers for Virgin to just four after receiving nine or so bids on Friday. Virgin first entered administration in late April, buckling under the intense financial pressure of the COVID-19 pandemic.
It declined to confirm the names on this shortlist. But Street Talk reported local private equity firm BGH Capital, Arizona-based airline investor Indigo Partners, wildcard bidder Cyrus Capital Partners and international private equity giant Bain Capital had qualified.
Brookfield was a notable exclusion other bidders had pegged it as a favourite to make it to the final stage of the bidding process, and it was the union bloc’s pick for Virgin’s new owner.
Yet Brookfield, whose bid came through its local private equity division, says it dropped out of the sale process instead of Deloitte pushing the asset manager out when it realised the shortlist would not be limited to just two bidders.
Brookfield believes there is not enough time for the complex negotiations between bidders, creditors and other stakeholders to take place and launch an informed bid for the airline by mid-June.
“It has been a very intense process so far,” Mr Strawbridge said. “The next phase of the process, the next two weeks, is really to work with the interested parties in a lot more detail about the underlying business plan to firm up their level of interest.”
“The detailed negotiations with aircraft financiers and unions et cetera, probably won’t commence until early June … I think there is enough time. And we’ll be working with those stakeholders to continue that progression about getting them all the information they need to put in a binding bid.”
Brookfield remains in discussions with Deloitte.
Still, for shortlisted bidders, the real work is just about to begin as they prepare to make their final pitches to buy Virgin Australia and navigate a complex set of stakeholders, including the federal government.
BGH Capital, backed by AustralianSuper, appears to be the frontrunner now, and it will position itself as the “Team Australia” option with the interests of workers front of mind.
The Melbourne-based firm is led in part by former Qantas suitor Ben Gray and has roped in ABL lawyer Leon Zwier and outgoing PwC chief Luke Sayers for advice.
Bain Capital, meanwhile, will point to its $10 billion of Australian money under management as an indication it is committed to the market while stressing its desire to invest long-term in Virgin.
It has recruited former Jetstar chief executive Jayne Hrdlicka, who is likely to put her hand up to run the recapitalised airline, to its bid.
Bain’s vision for the airline includes simplicity with a focus on leisure travel, small-to-medium enterprise and price-sensitive corporate travel segments.
The Australian Financial Review could not reach Indigo Partners and Cyrus Capital Partners for comment.
Transport Workers Union’s national secretary, Michael Kaine, said his focus remained on dealing with serious bidders. The TWU represents the most significant portion of Virgin’s 9000 workers, who the airline owes about $450 million in entitlements.
“Workers will be measuring Virgin bids on the extent to which bidders commit to long-term investment and outline the pathway back to operating a full-service Virgin with decent jobs for Virgin employees,” Mr Kaine said.
“It is in the interests of all Virgin workers that all potential serious bidders urgently engage within the administrator’s process. Our focus remains on working with serious bidders who can engage with the workforce to see Virgin back to health as a genuine sustainable second Australian airline.”