Virgin Australia Financially Secure? [Now in Voluntary Administration]

[Must...Fly!]

Quite frankly the fact that Morgan's let mum and dad investors invest in VA bonds suggest that they would be a firm I would not use.

Indeed it seems like quite the PR exercise they are rolling out

 

[oz_mark]

* Jetstar v2.0 (Potentially with 'disgruntled' former JQ CEO Hrdlicka at the helm)

I tend to think that if Bain were to get up, we may find Hrdlicka as the chair of the board, rather than CEO.

 

[antycbr]

I tend to think that if Bain were to get up, we may find Hrdlicka as the chair of the board, rather than CEO.

She can't do any worse than the current board has done, provided she sticks to the Chair role not being a defacto alternate CEO.

 

[moa999]

we may find Hrdlicka as the chair of the board, rather than CEO.

Are you assuming VAH remains listed?

 

[BNEFlyer]

She can't do any worse than the current board has done, provided she sticks to the Chair role not being a defacto alternate CEO.

The current board did one thing right by agreeing to put VA into adminstration.

 

[Melburnian1]

Are you assuming VAH remains listed?

I don't believe it'll survive - liquidation likely - but if it did, surely it'd be a private company? Its shares are suspended. Existing public shareholders will not receive even 0.1 cents per share.

 

[oz_mark]

Are you assuming VAH remains listed?

No, they may give it another name, but it still needs a governance structure that will report to its new shareholders, however many there are...

 

[jakeseven7]

I tend to think that if Bain were to get up, we may find Hrdlicka as the chair of the board, rather than CEO.

Well the 'public' reason she left A2 was work life balance *cough*

 

[moa999]

No, they may give it another name, but it still needs a governance structure that will report to its new shareholders, however many there are...

Just that Chair of a public company is very different to a private company from an importance perspective.

If there is any form of debt-equity or lessor-equity conversion I'd expect they would prefer a public listing to remain so they can exit after some holding period.

Well the 'public' reason she left A2 was work life balance *cough*

Not inconsistent. Chair isn't typically a full-time role

 

[Melburnian1]

..If there is any form of debt-equity or lessor-equity conversion I'd expect they would prefer a public listing to remain so they can exit after some holding period.

Doesn't public listing require a minimum number of shareholders and some other requirements?

VAH has (as noted above) already been suspended and will be delisted I'd think.

 

[moa999]

Doesn't public listing require a minimum number of shareholders and some other requirements?

VAH has (as noted above) already been suspended and will be delisted I'd think.

All depends on what is done.
Eg. The reconstruction of Norwegian left existing shareholders with under 5% after massive dilution from conversion.

Quite possible for the listing to be retained with lots of new shares issued and possible change in code/name.
Then probably a 10:1 consolidation to get the share price back to typical levels, and a unmarketable parcel buyback

 

[Carrots]

“A lot of people are watching to see how the bond holders fare in the administration process,” he said.

I think what he means to say is "we're slightly concerned about the all but guaranteed losses and are working to ensure we save face and deflect blame elsewhere".

Or maybe I'm being too cynical

 

[Scr77]

Virgin's administrator pleads for government support to stop bidders from walking away

Virgin's administrator writes to the Federal Government, saying it is worried bidders for the troubled airline might pull out in the absence of support for the airline industry.

www.abc.net.au

 

[QF WP]

It's an intersting position for an Administrator to publicly request assistance when most of the time, it's done directly and behind closed doors in William Street.

@Scr77, if you are going to post a news story, you should comment about it as well....

 

[travel_bug]

Virgin's administrator pleads for government support to stop bidders from walking away

Virgin's administrator writes to the Federal Government, saying it is worried bidders for the troubled airline might pull out in the absence of support for the airline industry.

www.abc.net.au

I understand most of what they're asking and see it as reasonable (many industries are calling for JobKeeper to be extended, and it's not terrible to call for an extension on subsidies for all airlines), but the call to guarantee VA tickets is laughable considering how shoddy VA were with cancelling flights and refusing to refund tickets even prior to administration, and how the courts have granted Deloitte the ability to sidestep any responsibility for a range of debts incurred/not discharged by the end of administration.

Maybe the gov should respond with sending Deloitte a copy of all court orders that removed their own liability for a range of costs that they would otherwise be personally liable for, and put forward that maybe asking for all of those concessions from the courts also wouldn't help buyer confidence in the sale.

 

[Melburnian1]

There's another article in 'The Oz' today about the bondholders (apparently more than 5000 in number) with commentary about how former PM Malcolm Turnbull once got others in a similar situation a better deal. The article states that VA bondholders need someone who is a trenchant negotiator to ensure they're not totally left out in the (monetary) cold.

The article gives a list of those who promoted these bonds. It wasn't just Brisbane-based Morgans. Thievery in my view, but I'm remarking with the advantage of hindsight.

The bondholders sure have a low public profile, or they did until these two or three 'The Australian' stories. Goodness knows what's going on behind the scenes. Hard to believe that a group (however disparate) collectively owed $2 billion would go down without a fight. It came out a while back that some public bodies like an Anglican Church entity (in Newcastle NSW?) had purchased the bonds.

 

[Scr77]

@Scr77, if you are going to post a news story, you should comment about it as well....

Sorry, was a bit busy lifting live power lines! But, it does look like the administrators could get backed into a corner. I’ve been trying to keep an open mind with this process. However, the longer this goes on, the greater the chance of liquidation. Of course, it could all be part of a game of getting a better deal!

 

[BNEFlyer]

It's an intersting position for an Administrator to publicly request assistance when most of the time, it's done directly and behind closed doors in William Street.

@Scr77, if you are going to post a news story, you should comment about it as well....

I'm curious how ABC saw the alleged letter and why it's being reported on?

 

[travel_bug]

I'm curious how ABC saw the alleged letter and why it's being reported on?

It's also been reported in the AFR with their article stating that the letter was sent to the offices of Morrison, McCormack, Frydenberg and Cormann. Though Deloitte has confirmed a letter was sent, it was a "source close to the sale" that gave the particulars, so could be anyone from those offices or from Deloitte.

This whole administration process has more leaks than a colander.

 

[jakeseven7]

I understand most of what they're asking and see it as reasonable (many industries are calling for JobKeeper to be extended, and it's not terrible to call for an extension on subsidies for all airlines), but the call to guarantee VA tickets is laughable considering how shoddy VA were with cancelling flights and refusing to refund tickets even prior to administration, and how the courts have granted Deloitte the ability to sidestep any responsibility for a range of debts incurred/not discharged by the end of administration.

Agreed - if they want to ask to see that the total airline industry support will be moving forward - then fine go right ahead, I'm sure REX, QF, Alliance et al are also interested to hear! No issue trying!

If they want special treatment though - they are going to get donut. Again. Its been speculated the administrators didn't do their math as well.... I wonder if this is contributing - or did VA1 management tell them some porky pies about the $....