Virgin Australia’s Administrators have shortlisted 4 potential buyers for the airline.
The list was whittled down from at least 8 non-binding bids that were received on Friday. ABC News reports the shortlisted buyers are US private investment firm Bain Capital, Australian private equity firm BGH Capital, US airline investor Indigo Partners and global investor Cyrus Capital Partners.
Cyrus was seen by media as a surprise inclusion. The company has previous invested in Virgin America and Flybe. Flybe went into administration in March after it failed to get a £100 million loan from the UK government. Bain also currently has a joint venture with the Virgin Group with Virgin Voyages cruises. Indigo Partners carrier Frontier Airlines has received a US government bailout. Indigo’s WizzAir has also received a £300 million soft loan from the UK government.
The Sydney Mornng Herald (SMH) quotes a “well-informed” observer as saying, “You would have to say there is a question about that, how you can go from asking for and accepting government support to wanting to buy another airline.” Lead Administrator Vaughan Strawbridge replied to the criticism by saying he was “comfortable with who our bidders are… and we’re comfortable with their financial capacity and their experience.”
In a statement the Administrators told media “We received more interest than anticipated from parties who are eager to be a part of the future of Virgin Australia. We are delighted by the strength of each of those on the shortlist, with parties selected being well-funded and possessing deep aviation experience.”
SMH also reports Canadian company Brookfield walked away after concerns the process was too complicated and wouldn’t be finalised by the August deadline unless only two bidders were shortlisted.
Velocity, Virgin’s profitable frequent flyer program, announced on Friday it was unfreezing point redemptions for some domestic destinations from 1 September.
The Administrators have not released the shortlist citing privacy requirements.