Yesterday, in an announcement, Scott Morrison revealed a ‘JobMaker’ plan to strengthen and grow the economy post-lockdown by focussing on equipping Australians with in-demand skills, assisting key industries such as manufacturing, working on a new tax system and more. He said that the emergency stimulus measures had kept the economy going but that it was Read More…
Virgin Australia to file for administration: reports
Mon 20 April 2020 - 8:48 pmNews
Virgin Australia has reportedly filed for voluntary administration as it’s overwhelmed by massive debt brought on by the coronavirus lockdowns.
An airline spokesman wouldn’t comment on Monday evening about various media reports.
The Sydney Morning Herald and the Age reported that a decision was expected to be made at tonight’s board meeting and that accounting firm Deloitte was expected to run the administration process, including finding potential buyers to keep it flying.
Deloitte referred comment back to the airline.
Melbourne-based private equity firm BGH Capital, whose co-founder Ben Gray led an unsuccessful bid in 2006 to buy Qantas, is among the private equity firms said to be interested in Virgin Australia.
With air travel down over 95 per cent because of the lockdown the airline had been seeking government assistance to help its financial situation but was rebuffed in its request for a $1.4 billion loan from the Morrison government.
“They have some very big shareholders with deep pockets,” treasurer Josh Frydenberg said.
Despite its ASX listing, Virgin Australia is 90 per cent foreign owned, with Etihad, Singapore Airlines and two Chinese conglomerates HNA and Nanshan Group owning around 20 per cent each, while Richard Branson’s Virgin Group owns 10 per cent.
The NSW and Queensland government had both said they were interested in throwing the airline a financial lifeline.
Victorian Premier Daniel Andrews said on Monday he’d been having conversations with Virgin for “many, many months before the global pandemic about their future.”
But he added his government was not interested in its taxpayers putting in large amounts of money “when all jobs were going to stay in Queensland or jobs could potentially even leave Victoria.”
Virgin halted 90 per cent of its flights and stood down 80 per cent of its workforce on March 25th, maintaining just 17 destinations to transport essential services, critical freight and logistics.
On Monday, Fitch Ratings and Moody’s both downgraded Virgin’s long-term rating due to concerns about its viability.
“In our view, without additional funding over the next few months, there is a high chance that the airline will not be able to survive the impact of the COVID-19 shut down,” Fitch said, adding that the federal government’s relief package provides little support past this fiscal year given the grounding of most of Virgin’s fleet.
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