Bain Capital agrees to acquire Virgin Australia

Virgin Australia’s administrator Deloitte has selected US private investment firm Bain Capital to acquire the struggling airline.

Bain Capital, along with Cyrus Capital Partners, reportedly made their final bid for the acquisition of the airline earlier this week.

Virgin Australia was struggling with long-term debt of A$5bn ($3.17bn) even before the coronavirus (Covid-19) pandemic paralysed global airline operations.

In April, the carrier was unsuccessful in securing government loans and eventually entered voluntary administration seeking bankruptcy protection amid the pandemic.

Citing Deloitte, BBC reported that Bain would become the new owner and the transaction is expected to be concluded by the end of August.

Bain will support the airline’s current management team and its turnaround plan. It also plans to retain thousands of jobs, the media further reported.

BBC quoted Deloitte as saying: “Bain Capital has presented a strong and compelling bid for the business that will secure the future of Australia’s second airline, thousands of employees and their families and ensure Australia continues to enjoy the benefits of a competitive aviation sector.”

Bain Australia managing director Mike Murphy told The Australian Financial Review that it plans to keep 5,000 to 6,000 of the total of 9,000 employees.

The proposal also included that it would operate between 60 and 70 of its Boeing 737 planes.

The two sides did not disclose any financial details of the agreement.

In a separate development, Australian flag carrier Qantas Group revealed plans to reduce its workforce by at least 6,000 employees across all parts of the business due to the pandemic.