Virgin Australia creditors lose almost everything under Bain

Unsecured creditors of Virgin Australia Holdings will lose almost all their money under a A$3.5b ($2.5b) deal to sell the collapsed airline to private equity firm Bain Capital. The average return to those creditors will be between 9% and 13%, and even less if the proposed agreement is voted down, administrator Deloitte said in a report Tuesday. Shareholders including marquee names such as Singapore Airlines and Etihad Airways are getting nothing. Priority creditors and employees will be repaid in full, according to the report. Virgin Australia failed in April under A$6.84b of debt as coronavirus-related travel restrictions took their toll. With creditors due to vote on Bain’s takeover proposal next week, the report reveals for the first time the expected hit to lenders. Their losses reflect Virgin’s financial frailty when it went under, as well as the cost of resurrecting an airline during an aviation crisis that shows little sign of relenting. Some 6,500 unsecured Virgin bondholders were owed A$1.9b, the report showed. Two of them, Broad Peak Investment Advisers and Tor Investment Management, last week scrapped their own rescue plan for the airline.<br/>