Ready for takeoff: Virgin back in the sky after creditors’ vote
Virgin has come back from the dead after a creditors’ meeting voted in favour of Bain Capital’s plan for the airline with 3000 fewer staff.
Virgin creditors have voted voted strongly in favour of the Bain Capital deal for Virgin. (Photo: Array)
Creditors, who were owed almost $7 billion following Virgin’s collapse, voted strongly in favour of the deal, 6456 votes in favour to 63 against.
“Today was an important milestone and a significant step in Virgin Australia’s recovery,” Bain managing director Mike Murphy said in a statement.
“We can now continue the rebuilding process from the strongest possible platform and with the least disruption. We are working closely with Virgin management to build a stronger, more profitable and competitive Virgin Australia, and we look forward to the future with confidence.”
Virgin managing director Paul Scurrah said it was an important outcome that would bring the airline closer to exiting administration.
“It is vital for Australia to have two major airlines for consumer choice, value airfares and to help support the recovery of Australia’s robust tourism sector after this crisis is over,” Scurrah said.
“While we can feel proud we have got to this point, the impact of COVID-19 remains very challenging for our business and industry. These are tough times and we must remain focused and adapt to this new environment.
“It’s been an incredibly tough journey for our people and they should be commended for how they have handled themselves.”
Bond holders, who tried unsuccessfully to have their own plan accepted, will receive about 13 cents in the dollar.
Part of getting support from all stakeholders meant Bain said it would include three union officials on an advisory panel with senior management.
Bain has promised to pay employees their full entitlements and to honour travel credits held by passengers as a result of cancelled flights.
Virgin’s founder Sir Richard Branson welcomed Bain’s new ownership of Virgin Australia.
“It has been a massive effort by the administrator, Bain, [Virgin chief] Paul Scurrah and the airline’s management team to get this far in the face of the global travel crisis.”
The Transport Workers’ Union was key to getting the deal approved and only swung behind the Bain deal this week.
TWU national secretary Michael Kane said it was a new beginning and an important day for Virgin and Australian aviation.
“I want to congratulate Virgin workers who have been instrumental in getting us to the point where Virgin has now been rebooted and is in a plan to get back to flying.”
The deal must now be approved by the Federal Court.
Administrator Vaughan Strawbridge said his role was challenging, but creditors had overwhelmingly voted in favour of the deal.
“This outcome provides certainty for employees and customers, a return to creditors, opportunities for suppliers and financiers to continue to trade with Virgin Australia Group as well as maintaining a competitive Australian aviation industry for the benefit of consumers,” Strawbridge said.
“There is still a lot of work to do to complete the restructuring of the airline and complete the sale transaction before the business is ready to emerge from voluntary administration under Bain’s ownership.”
