Bondholders make last-minute bid for Virgin Australia

Virgin Australia bondholders have lodged an eleventh-hour proposal to recapitalise the stricken airline that is the subject of rival takeover bids from two US private equity groups. Deloitte, the carrier’s administrator, is in the process of evaluating competing offers from consortiums led by Bain Capital and Cyrus Capital Partners. It is expected to announce a preferred bidder as early as this week. The entry of Virgin bondholders into that process on Wednesday could complicate efforts to complete the sale and the restructuring of the company’s A$7b (US$4.9b) debt by August. The bondholders, which are owed about A$2b, are as a group one of the airline’s largest creditors. A person with knowledge of the matter said the bondholders had proposed injecting A$1bn in fresh capital into Virgin, a debt-for-equity swap and relisting the company on Australia’s stock exchange. The bondholders include up to 30 big foreign and domestic institutions and more than 5,000 retail investors. <br/>