Virgin Australia to be sold to Bain Capital

[jakeseven7]

Bondholders fight to reveal secret terms of Virgin sale

Two Virgin Australia bondholders, Tor Investment Management and Broad Peak Investment Advisers, are fighting to unlock the confidential terms surrounding the sale of the airline to Bain Capital, just days after they asked the Takeovers Panel to intervene in the process.

Bondholders fight to reveal secret terms of Virgin sale

Two Virgin Australia bondholders, Tor Investment Management and Broad Peak Investment Advisers, are fighting to unlock the confidential terms surrounding the sale of the airline to Bain Capital.

www.afr.com

 

[RooFlyer]

Yes, Americans are wonderful global citizens, no one in the world we would rather be associated with.
But hey beggars can't be choosers.

No doubt meant humorously, but given the regulation in the US financial markets, and Australia's, then yes if it has to be an overseas buyer then one from the USA is one of the better ones.

 

[RAM]

No doubt meant humorously, but given the regulation in the US financial markets, and Australia's, then yes if it has to be an overseas buyer then one from the USA is one of the better ones.

Funny Jakeseven7 should say that as in many instances the US has many-fold the protections for consumers, travellers & companies that Australia has.

Australia has more protection than China. So....

For example, following coincidentally a large number of LARGE political donations to both sides of politics - the rules for fraud on credit & debit cards as well as bank accounts were changed in the very early 2000s from the institution having to prove that YOU DIDN'T take adequate security precautions to YOU PROVING you did. Notably, the donations from two very well known financial institutions stopped the following financial year, and the last time I checked the AEC website - had not made any since. Just another one of those totally unrelated coincidences.

A massive change.

Yet in the US, the last time I checked, a consumer is only liable for the first USD25 of the fraud (provided the institution cannot prove you willingly participated).

Similarly, if an airline mucks you around on a flight to/from or transiting the US - you actually have rights for minimum compensation.

Mean more back OT....

Well I never, a Vulture fund in Singapore (that is amongst one of the over 1,100 Temasek investments) is trying to possibly get 5-10x what it may have paid for some unsecured bonds (1 cent in the dollar perhaps?), as well as a noname 'fund manager' are rattling the cage - yet for some reason have access to multiple major media outlets?

I wonder if any (or all) of those media outlets are ever used by Q for advertising, or perhaps have an owner that also receives sometimes over $10,000,000/ year in tv/radio revenue? No, nothing to see here.

Meanwhile, still nothing heard about the investigation into AJ's comments about VA some months back.

Has anyone seen the detailed business plan AJ has put together for the next three years for Q? How many potential layoffs? The decision points for permanently ditching the A380s? The plan for QFF point values? Somehow Bain has to supply every detail (it appears) of its business plan for all & sundry? When Q was teetering on liquidation roughly 10 years back - there were no calls for any of this information either.

Does make you wonder just what the real valuation of the Chairman's Lounge is?

Does make you wonder just how different Australia's media is compared with the Chinese media? Sometimes the differences don't seem that great.

 

[eastwest101]

Bondholders fight to reveal secret terms of Virgin sale

Two Virgin Australia bondholders, Tor Investment Management and Broad Peak Investment Advisers, are fighting to unlock the confidential terms surrounding the sale of the airline to Bain Capital, just days after they asked the Takeovers Panel to intervene in the process.

Bondholders fight to reveal secret terms of Virgin sale

Two Virgin Australia bondholders, Tor Investment Management and Broad Peak Investment Advisers, are fighting to unlock the confidential terms surrounding the sale of the airline to Bain Capital.

www.afr.com

Thats a reasonable article - I read a comment online that summarized the realities of the second creditors meeting and the Deed of Company Arrangement pretty well, I think it will all come down to whats presented in the meeting to creditors:

Employees have a majority in number and secured creditors (including aircraft lessors) have a majority in value. If either of those groups vote in favour of a DOCA it would pass (on the Administrator's casting vote in the event of a split vote).

Seems pretty simple and definative. Having said that - the Federal Court ruling on Friday was interpreted as this (my bolding):

Federal Court judge John MiddleSton ruled last Friday in favour of a submission by Deloitte’s Vaughan Strawbridge, that sought to keep the sale contract signed with Bain under wraps.

In a judgment that suggested the deal was far from watertight, Justice Middleton said he accepted that public disclosure of the material could result in the relevant transactions being prejudiced.

“That includes a risk that, due to the complexity of the transaction and the significant number of steps and conditions precedent that must be satisfied, unauthorised disclosure of some or all of the terms of the transaction may lead to misapprehension or confusion on the part of creditors or other stakeholders as to the implications of the transaction,” said the ruling.

So if the proposed details of the Bain offer can't survive first contact with the public eye, and a Federal Judge is saying that, then dosen't that open up other legal/FIRB/Takeovers Panel avenues for the unsecured bondholders against Deloitte?

I am also wondering if the unsecured creditors can co-opt the assistance of the ex-retail VAH australian shareholders who now have nothing to lose, to produce some new stalling/derailing tactic via a shareholding action of some sort? We haven't heard anything from ex-VAH shareholders in the media and although they definately seemed to have lost their money, might be useful for someone.

The other comment that struck me was that in the event of liquidation (which seems unlikely at the moment), the liquidated companies AOC instantly becomes null and void, and all the assets of VA (access to current government assitances, Jobkeeper payments, owned aircraft, training facilities, staff, airport leases, any value and goodwill of the brand, Velocity etc etc) all instantly become totally (more) worthless without an AOC, loss of AOC is literally a show stopper, and is a step change in the liquidation value of the assets.

 

[jakeseven7]

Thats a reasonable article - I read a comment online that summarized the realities of the second creditors meeting and the Deed of Company Arrangement pretty well, I think it will all come down to whats presented in the meeting to creditors:

Employees have a majority in number and secured creditors (including aircraft lessors) have a majority in value. If either of those groups vote in favour of a DOCA it would pass (on the Administrator's casting vote in the event of a split vote).

Seems pretty simple and definative. Having said that - the Federal Court ruling on Friday was interpreted as this (my bolding):

Federal Court judge John MiddleSton ruled last Friday in favour of a submission by Deloitte’s Vaughan Strawbridge, that sought to keep the sale contract signed with Bain under wraps.

In a judgment that suggested the deal was far from watertight, Justice Middleton said he accepted that public disclosure of the material could result in the relevant transactions being prejudiced.

“That includes a risk that, due to the complexity of the transaction and the significant number of steps and conditions precedent that must be satisfied, unauthorised disclosure of some or all of the terms of the transaction may lead to misapprehension or confusion on the part of creditors or other stakeholders as to the implications of the transaction,” said the ruling.

So if the proposed details of the Bain offer can't survive first contact with the public eye, and a Federal Judge is saying that, then dosen't that open up other legal/FIRB/Takeovers Panel avenues for the unsecured bondholders against Deloitte?

I am also wondering if the unsecured creditors can co-opt the assistance of the ex-retail VAH australian shareholders who now have nothing to lose, to produce some new stalling/derailing tactic via a shareholding action of some sort? We haven't heard anything from ex-VAH shareholders in the media and although they definately seemed to have lost their money, might be useful for someone.

The other comment that struck me was that in the event of liquidation (which seems unlikely at the moment), the liquidated companies AOC instantly becomes null and void, and all the assets of VA (access to current government assitances, Jobkeeper payments, owned aircraft, training facilities, staff, airport leases, any value and goodwill of the brand, Velocity etc etc) all instantly become totally (more) worthless without an AOC, loss of AOC is literally a show stopper, and is a step change in the liquidation value of the assets.

Yes...

There was a piece on ABC Newsradio that covered many of the same topics and hypothesised that Deloitte might actually come unstuck because they got sloppy and panicked towards the end as they saw the night closing on VA1 very very quickly.

And with further adhoc border closures bound to happen with minimal notice and no end date to rolling restrictions in sight, I honestly think Bain (or anyone) is mad buying any Australian airline right now!

Very interesting to see what happens....

 

[RAM]

Thats a reasonable article - I read a comment online that summarized the realities of the second creditors meeting and the Deed of Company Arrangement pretty well, I think it will all come down to whats presented in the meeting to creditors:

Employees have a majority in number and secured creditors (including aircraft lessors) have a majority in value. If either of those groups vote in favour of a DOCA it would pass (on the Administrator's casting vote in the event of a split vote).

Seems pretty simple and definative. Having said that - the Federal Court ruling on Friday was interpreted as this (my bolding):

Federal Court judge John MiddleSton ruled last Friday in favour of a submission by Deloitte’s Vaughan Strawbridge, that sought to keep the sale contract signed with Bain under wraps.

In a judgment that suggested the deal was far from watertight, Justice Middleton said he accepted that public disclosure of the material could result in the relevant transactions being prejudiced.

“That includes a risk that, due to the complexity of the transaction and the significant number of steps and conditions precedent that must be satisfied, unauthorised disclosure of some or all of the terms of the transaction may lead to misapprehension or confusion on the part of creditors or other stakeholders as to the implications of the transaction,” said the ruling.

So if the proposed details of the Bain offer can't survive first contact with the public eye, and a Federal Judge is saying that, then dosen't that open up other legal/FIRB/Takeovers Panel avenues for the unsecured bondholders against Deloitte?

I am also wondering if the unsecured creditors can co-opt the assistance of the ex-retail VAH australian shareholders who now have nothing to lose, to produce some new stalling/derailing tactic via a shareholding action of some sort? We haven't heard anything from ex-VAH shareholders in the media and although they definately seemed to have lost their money, might be useful for someone.

The other comment that struck me was that in the event of liquidation (which seems unlikely at the moment), the liquidated companies AOC instantly becomes null and void, and all the assets of VA (access to current government assitances, Jobkeeper payments, owned aircraft, training facilities, staff, airport leases, any value and goodwill of the brand, Velocity etc etc) all instantly become totally (more) worthless without an AOC, loss of AOC is literally a show stopper, and is a step change in the liquidation value of the assets.

Simple answer = no.

The unsecured bondholders know they do not have a legal leg to stand on in getting any extra payout from Bain - so they are squaking as loudly as possible. Their 'paid advisors' and Vulture fund have their own interests as well.

Bain was required (as all bidders were) to present a detailed business plan across the entire business including ALL plans for the resurrection process covering advertising, pricing, timing, structure etc.

Q is VERY keen to see this as it would allow them to white ant the new VA. If VA plans to launch a sale on X/Y/20 then Q launches a coincidentally similar sale 2 days earlier...

Any takeover has a list of conditions precedent which NEVER get revealed - otherwsie competitors can try to intiate one & make the takeover fall over.

For example, there is guaranteed to be one linked to a decline in the Australian share market, another linked to the USD/AUD & EUR/AUD exchange rate levels etc.

The degree of attempted spoiling & seemingly 'in cahoots' radio/tv/newpaper media is concerning.

Where is the balance? I could well have missed the articles - but where are any of the normal financial journalists pointing out the facts of the situation rather than the spin from the Q & unsecured bondholders?

Up-thread I identified the only one article that laid out the facts - that article was from a points travel blogger.

 

[moa999]

While I agree some CPs should be kept secret, surely the various unsecured holders are entitled to understand what they might be paid.

And I'm not sure if there are many vulture funds involved here (and if they paid a few cents as you mentioned previously).
The cheapest the listed bonds sold for was about 40c, and the fact this went downhill so quickly typically means not many unlisted bonds would have traded.

 

[drron]

While I agree some CPs should be kept secret, surely the various unsecured holders are entitled to understand what they might be paid.

And I'm not sure if there are many vulture funds involved here (and if they paid a few cents as you mentioned previously).
The cheapest the listed bonds sold for was about 40c, and the fact this went downhill so quickly typically means not many unlisted bonds would have traded.

Only problem with that scenario is that VA shares and bonds went into a trading halt the week before the announcement of voluntary administration.At that point the bonds were potentially worthless and so bondholders could well accept any offer that came their way to at least get something.

 

[RAM]

While I agree some CPs should be kept secret, surely the various unsecured holders are entitled to understand what they might be paid.

And I'm not sure if there are many vulture funds involved here (and if they paid a few cents as you mentioned previously).
The cheapest the listed bonds sold for was about 40c, and the fact this went downhill so quickly typically means not many unlisted bonds would have traded.

Actually there were numerous off-market transactions across ALL VA unsecured bonds (many issued in the US) for as low as 1 cent that I've seen. Every bond traded below 9 cents per dollar face value. There were countless transactions (reportedly) in the last few days within Australia leading up to 30 June so people could claim a loss off tax in the 2019/20 financial year. Could one 'mentioned' fund manager have been the buyer perhaps? Looking for a 5, 6 or ten-fold return on investment possibly?

The 'Vulture' fund is one that is constantly being linked in media articles to Temasek. Reality, it is just one of Temasek's over 1,300 investments made in Singapore in unlisted entities, amongst its approx SGD$300bn of investments.

Close to zero impartiality being seen in the articles around - why? Who's agenda is being pushed here?

 

[jakeseven7]

I forgot to post this part earlier, on ABC radio QLD there were also rumours Bain would shut the VA1 Village (HQ) down and move to a cheaper location, apparently they will be needing significantly less space....

 

[AIRwin]

I forgot to post this part earlier, on ABC radio QLD there were also rumours Bain would shut the VA1 Village (HQ) down and move to a cheaper location, apparently they will be needing significantly less space....

Where?!

 

[jakeseven7]

Where?!

Said something like moving into the old Flight Centre building (as they've made heaps of people redundant as well apparently)?

Still in QLD obviously since they are getting a bail out from the QLD government to stay.


EDIT:

Ok found this (sorry I listen to the radio while I work so hard to find the source!)

Virgin works agency’s angles

Virgin Australia may have been in talks with Flight Centre about taking space at the travel agency’s Brisbane headquarters following a large round of COVID-19-related job cuts

NoCookies | The Australian

www.theaustralian.com.au

 

[moa999]

numerous off-market transactions across ALL VA unsecured bonds (many issued in the US) for as low as 1 cent that I've seen. Every bond traded below 9 cents per dollar face value.

Can I ask where you are seeing this?
Not surprised some took a loss before 30 June.

I don't see anything wrong with he current press. The media reacts to who is providing information on record or leaking.

If the administrator wants to provide a different view, they know how.

 

[HS-TQE]

Rumours are the top floors of the Flight Centre building in South Bank (South Brisbane). As reported, Flight Centre are also downsizing due to their own ongoing losses.

 

[RAM]

Can I ask where you are seeing this?
Not surprised some took a loss before 30 June.

I don't see anything wrong with he current press. The media reacts to who is providing information on record or leaking.

If the administrator wants to provide a different view, they know how.

Am involved in finance industry so I see much that is not generally available.

About the press - if the media WOULD print the other side or actually the factual side of the story = all is OK.

Trouble is, as I have copious proof of (including getting NSW State Govt Auditor General investigation) the media DO NOT publish what the vested interests do not want published.

Ever read that Gladys, as Minister for Transport, awarded two multi-billion $$ contracts in 2014 to an organisation that was under investigation for bribery in 17 different countries, and four days after awarding them the CSELR (for 30 years) - the company ADMITTED engaging in systemic corruption globally to win business - paying by shoeboxes of USD 100 bills sent out by courier from a single branch Swiss Bank? The FBI got one director to wear a wire to Paris Board meetings and recorded over 48 hours of discussions about how much to bribe various Govt MPs & bureaucrats around the world in order to win projects in transportation or power generation. They admitted setting up two departments in France with the sole objective of bribing to win contracts.

Alstom Pleads Guilty and Agrees to Pay $772 Million Criminal Penalty to Resolve Foreign Bribery Charges — FBI

WASHINGTON Alstom S. A. (Alstom), a French power and transportation company, pleaded guilty today and agreed to pay a $772,290,000 fine to resolve charges related to a widespread scheme involving tens of millions of dollars in bribes in countries around the world, including Indonesia, Saudi...

www.fbi.gov

This effectively bankrupted them - yet the NSW Govt declared they were good for the 30 yr CSELR contract just 4 days earlier despite the case being lodged against them in the US 11 months earlier (public record btw not sealed).

I provided all this information to every party in the NSW Upper House and held briefings with many of them. All said 'Just wait & we'll pursue this', & none never did. Not the Greens, ALP, Nile etc etc.

The Upper House Inquiry in 2018 also embargoed my submission and threatened me if I made it public....

Another example, until I provided the details from the ASIC website about voluntary administration to a number of parties - wrong information about the process was being published by the mainstream media. Perhaps suggesting that I was concerned about an illegal agenda being pursued & was thinking about approaching a well known corruption body about regulatory breaches - may have seen a slight change.

After all if a media outlet is KNOWINGLY spreading false information then that can be very expensive for them. Having an audit trail of emails to various journalists correcting their continuously incorrect information with reference to ASIC was quite useful in focusing their attention on this matter.

Unfortunately the Australian media, is reality, probably just as controlled/manipulated as the media is in China.

Track down the Hansard record of Question Time in the House of Reps after Tiananmen Square in June 1989 & look at what Bob Hawke admitted to. NEVER reported by any media either in or outside of Australia.

 

[serfty]

Where?!

The VA overflow lounge at BNE Domestic?

 

[Melburnian1]

This is a brief that's just landed in 'The Australian' business section (online) on Thursday 9 July 2020 in the arvo:

'Virgin Australia bondholders have proposed a debt-to-equity conversion worth 69 cents in the dollar, as well as funding for the airline, according to their court filing today. '

 

[trippin_the_rift]

<snip>

Unfortunately the Australian media, is reality, probably just as controlled/manipulated as the media is in China.

<snip>

The mainstream media is a total joke. Totally untrustworthy. More people are waking up to this.

 

[SeaWolf]

The attempt by the bondholders to reveal the details of the Bain sale agreement has been thrown out.

Virgin bondholders can't access sale documents, mull alternative offer

Broad Peak Investment Advisers and Tor Investment Management have received a decisive blow to their efforts to unlock secret documents.

www.afr.com

 

[HS-TQE]

And there goes that "joke of an attempt" by Singapore Inc/Temasek to try to grab control of VA(H) from the back door via the bondholders..