Virgin Australia Financially Secure? [Now in Voluntary Administration]

[antycbr]

Struggling to see (in reality) what that unacceptable option would be really...
VA1 was almost majority Chinese owned before - and that seems like the only potential lightning rod at the moment.

Would the Feds care if the Indians won out with IndiGo, for example?

Agreed, I think the gov would prefer it not to be Chinese mainland (or HKG as it’s no longer truly Two Systems any more) owned this time round due to the optics.

A predominately Australian owned bid would also mean the convoluted workaround for international wouldn’t be needed any more.

Post automatically merged: May 17, 2020

I have a feeling BGH with Aust super my be the winner here just my 2 cents Worth

Maybe, just maybe the government can lay off industry super funds for 5 minutes if this comes to pass. BGH certainly sound like front runners.

 

[tomlee1986]

Agreed, I think the gov would prefer it not to be Chinese mainland (or HKG as it’s no longer truly Two Systems any more) owned this time round due to the optics.

Actually Hainan airlines is not HKG based, but mainland PRC based... and I agree... HK is not truly 2 systems anymore.. (I know because I am born in HK, and Chinese origin)

 

[antycbr]

Actually Hainan airlines is not HKG based, but mainland PRC based... and I agree... HK is not truly 2 systems anymore.. (I know because I am born in HK, and Chinese origin)

Hainan is from Hainan Island of course.
I guess I’m arguing that the government would consider a bid by a HKG a defacto mainland bid (a bit like CKI from Hong Kong bidding for Ausgrid was rejected)

OT but Hong Kong is a tragedy that the world is not noticing while Coronavirus plays out.

 

[tomlee1986]

Hainan is from Hainan Island of course.
I guess I’m arguing that the government would consider a bid by a HKG a defacto mainland bid (a bit like CKI from Hong Kong bidding for Ausgrid was rejected)

OT but Hong Kong is a tragedy that the world is not noticing while Coronavirus plays out.

I will say HK wont make any bids.. as CX is already struggling to make any money, VA1 owners Hainan owns HK airlines - that is in a worse situation than CX themselves, so I doubt any bids from HK will happen

 

[oz_mark]

As you probably know, VA1 was almost majority owned by Hainan air, I can say that airline is in serious trouble financially before COVID 19

Hainan owned about 20% of Virgin, which is a tad short of "majority owned".

Perhaps you meant Chinese groups, which, with Nanshan, would total about 40%.

 

[AIRwin]

Perhaps you meant Chinese groups, which, with Hanshan, would total about 40%.

Yes, the other Chinese shareholder is Nanshan...

 

[33kft]

I think the gov would prefer it not to be Chinese mainland (or HKG as it’s no longer truly Two Systems any more) owned this time round due to the optics.

I doubt the federal government care one iota. The bad optics was public financial support for an airline almost half owned by Chinese investors, not the ownership itself.

 

[jakeseven7]

A predominately Australian owned bid would also mean the convoluted workaround for international wouldn’t be needed any more.

This is true, assuming the new owner of VA2 wants to fly internationally of course.

 

[melb78]

As you probably know, VA1 was almost majority owned by Hainan air, I can say that airline is in serious trouble financially before COVID 19

Just to clarify Etihad was the major owner with about 20.94% the rest had about 20 percent

 

[oz_mark]

I doubt the federal government care one iota. The bad optics was public financial support for an airline almost half owned by Chinese investors, not the ownership itself.

They actually do care. In most cases, foreign ownership will be a tick and flick, but there are cases where they will look more closely.

Having said that, based on the names that have been bandied about in the media, I don't think there would be too much of concern.

 

[33kft]

Having said that, based on the names that have been bandied about in the media, I don't think there would be too much of concern.

Which is exactly my point. I am not talking in generalities here, I am specifically saying that in the current situation where a "market based solution" is found I doubt there are many ownership models that would be considered worse than what was in place previously, and the federal government would be entirely aware that any interference now would be painted in a very poor light given prior refusals of financial support.

 

[Doctore1003]

"Indian aviation investor InterGlobe Enterprises could be locked out of the Virgin Australia sale after failing to submit an indicative enterprise value with its first-round offer.

Sources familiar with the sale process said InterGlobe was asked to update its detailed expression of interest over the weekend, to include an enterprise value that could be compared to offers from other bidders.

It is understood InterGlobe did not budge and argued it would be pointless putting a highly conditional and non-binding value on Virgin, given the limited and high-level nature of due diligence to date."

InterGlobe's Virgin bid in balance after dodging value question

Indian aviation investor InterGlobe Enterprises could be locked out of the Virgin Australia sale after failing to submit an indicative enterprise value with its first round offer.

www.afr.com

 

[jakeseven7]

This is one leaky bucket of an administration process

 

[oz_mark]

I am often amazed at the AFR and its ability to get information on business transactions, not just on this, but quite generally

Anyway, once they select the short list, then things will get really interesting

 

[melb78]

this time maybe Monday we will find out a bit more. I still think team Aust super and BGH
will be the best pick of the bunch

 

[antycbr]

Yes, the other Chinese shareholder is Nanshan...

Nanwho? Let’s hope that a new VA has one sensible airline partner not the rag tag band that owned VA1.

 

[antycbr]

I doubt the federal government care one iota. The bad optics was public financial support for an airline almost half owned by Chinese investors, not the ownership itself.

There’s a rising sentiment domestically against PRC control of infrastructure and companies more generally, especially after the comments of the PRC ambassador. If the gov has a chance of avoiding that they will be very happy.

 

[tomlee1986]

There’s a rising sentiment domestically against PRC control of infrastructure and companies more generally, especially after the comments of the PRC ambassador. If the gov has a chance of avoiding that they will be very happy.

I believe this anti PRC sentiment is more world wide since February with the Covid 19 virus was spread around the world

 

[cove]

I think the shareholders capital is totally lost.

 

[tomlee1986]

I think the shareholders capital is totally lost.

This is common to companies that went bust no matter which industry