Virgin Australia’s creditors agreed to sell the airline to Boston-based Bain Capital in a deal that will cut 3,000 jobs at the carrier and end many of its international flights.
Co-founded by British businessman Richard Branson, in April the airline became the world’s largest to seek bankruptcy protection after the pandemic grounded much of the aviation industry. It plans to reemerge with cheap fares as a value-based carrier.
Another airline founded by Branson, Virgin Atlantic, last month filed for protection in the US bankruptcy court as part of a process in the United Kingdom to carry out a restructuring plan.
Virgin Australia said that under the deal with Bain, worth 3.5 billion Australian dollars ($2.5 billion), unsecured creditors would get paid between 9 and 13 cents on the dollar for their claims. Virgin’s creditors are owed a total of about AU$7 billion. Due to the pandemic, the creditor meeting was held online. The administrators signed a binding agreement in June with Bain Capital, the company co-founded by US Senator Mitt Romney.
Paul Scurrah, the chief executive of Virgin Australia Group, said the sale moves the airline closer to leaving bankruptcy protection and allows it to focus on the future, in which it will continue competing with its larger rival, Qantas Airways.
“It’s 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 in a statement. Virgin’s administrator Deloitte said creditors had voted overwhelmingly in favor of the deal in what have been challenging circumstances.—Arab news