Bondholders of Virgin Australia Holdings have reportedly taken back a proposed airline recapitalisation plan.
The company was planning a recapitalisation to rival the deal from US private equity firm Bain Capital, reported Reuters.
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In June, Virgin Australia’s administrator Deloitte selected Bain Capital to acquire the struggling airline instead of Cyrus Capital Partners.
The airline holdings company entered voluntary administration seeking bankruptcy protection amid the coronavirus (Covid-19) pandemic.
Broad Peak and Tor Investment Management hold nearly $216m of Virgin’s A$2bn ($1.43bn) of unsecured bonds.
The bondholders put forward an alternative deed of company arrangement (DOCA) in July.
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By GlobalDataHowever, a recent ruling from a court does not allow due diligence completion and putting forward ‘a considerably ‘unconditional DOCA proposal to rival Bain’, according to the news agency.
A creditors’ meeting is scheduled to take place on 4 September. In addition, Deloitte is planning to release a report to creditors on 25 August.
A bondholders’ spokesman was quoted by Reuters as saying: “After the release of the administrator’s report, we reserve our rights to take whatever action is necessary to protect our interests as creditors.”
Earlier this year, Virgin Australia reportedly revealed plans to lay off around 3,000 of its 9,000 workers as part of its strategy to relaunch the carrier under new owner Bain Capital.
Last month, UK carrier Virgin Atlantic secured a £1.2bn refinancing package over the next 18 months to stabilise its position after the pandemic.
