June 2, 2020 / 6:26 AM / a month ago

Virgin Australia administrator picks Bain, Cyrus as final bidders

FILE PHOTO: Aircraft from Virgin Australia sit on the tarmac at the domestic terminal of Sydney Airport in Australia, August 19, 2018. Picture taken August 19, 2018. REUTERS/David Gray/File Photo

SYDNEY (Reuters) - Virgin Australia Holdings Ltd’s (VAH.AX) administrator said on Tuesday it had selected Bain Capital and Cyrus Capital Partners as the final bidders for the country’s second-biggest airline.

Administrator Deloitte said they had been selected from five non-binding proposals received on Friday. It is seeking a binding agreement with the winning bidder by June 30.

The others that had lodged proposals included BGH Capital, Indigo Partners and Brookfield Asset Management, Reuters had previously reported.

Virgin owed nearly A$7 billion ($4.76 billion) to creditors when it entered voluntary administration in April with its long-running financial struggles exacerbated by the coronavirus pandemic.

The next phase for the parties on the final shortlist will include further engagement with stakeholders and aircraft financiers as they seek agreements on future terms before binding bids are received, Deloitte has said.

The strong interest in Virgin at a time when the world aviation market is largely grounded shows the long-time attractiveness of the Australian domestic market, a duopoly between Qantas Airways Ltd (QAN.AX) and Virgin.

Bain, which owns Trans Maldivian Airways, is being advised on its Virgin offer by Jayne Hrdlicka, the former head of Qantas budget airline Jetstar.

Cyrus was an investor in Virgin America alongside Virgin founder Richard Branson before its sale to Alaska Airlines. Cyrus also invested in collapsed British carrier Flybe with Virgin Atlantic.

($1 = 1.4712 Australian dollars)

Reporting by Jamie Freed, Scott Murdoch and Paulina Duran; Editing by Kim Coghill

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