Virgin Australia bondholders lodge rival proposal to US firms

Virgin Australia Holdings bondholders lodged a last-ditch recapitalisation proposal for the struggling airline on Wednesday, seeking to recoup more of their investment and stop its sale to a US private equity firm. The proposal, which would keep Australia’s second largest airline a listed entity, came two days after Bain Capital and Cyrus Capital Partners made final and binding offers to administrator Deloitte. “Our plan offers a sustainable capital structure underpinned by public ownership to provide certainty and support the strong operating plan for the airline,” a spokesman for the bondholders said. The proposal involves a debt-to-equity swap among bondholders owed around A$2b plus a fresh capital injection of around A$1b, one person with knowledge of the proposal said. That would allow bondholders to recoup around 70 cents on the dollar of their investment, the person said. A second source said that return was a future estimate based on share trading expectations. The bondholder statement did not identify those taking part, saying only they included thousands of retail investors. FIIG Securities, Northern Trust Asset Management, Sargon CT and The Bank of New York Mellon are all on the creditors’ committee.<br/>