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  • An overwhelming vote of support from creditors has approved Bain Capital as the new owner of Virgin Australia (VAH)
  • A meeting to finalise the sale, which took place on Friday, revealed the airline would be sold to the private investment firm for $3.5 billion
  • It comes after Virgin Australia went into administration over April as the COVID-19 pandemic affected airlines the world over
  • Looking ahead, representatives for Virgin said up to 60 of its Boeing 737s would be up and running in 2021
  • A number of court procedures will take place by the end of October to officially sell Virgin Australia to the Boston-based fund manager
  • Virgin Australia last trade for 8.6 cents per share on the ASX in mid-April

An overwhelming vote of support from creditors has approved Bain Capital as the new owner of Virgin Australia (VAH).

Bain has been poised to take the reins at Virgin for quite some time, but a creditors meeting on Friday made the deal official and revealed the airline would be sold to the private investment firm for $3.5 billion.

Under the wings of administrator Deloitte, Virgin Australia found its match in Bain after a lengthy campaign for a new buyer.

“Since our appointment on April 20, we have worked hard to deliver the best possible outcome for all creditors and today they have overwhelmingly voted to support our opinion that it is in their interest to approve the [deeds] proposed by Bain Capital,” Deloitte Administrator Vaughan Strawbridge commented.

“This outcome provides certainty for employees and customers, a return to creditors, opportunities for suppliers and financiers to continue to trade with the Virgin Australia Group as well as maintaining a competitive Australian aviation industry for the benefit of consumer,” he continued.

Bain Capital’s bid to purchase the airline saw overwhelming success during the creditors meeting, with 99 per cent voting in favour.

“We can now continue the rebuilding process from the strongest possible platform and with the least disruption,” Bain Capital Australia Managing Director Mike Murphy stated.

“We are working closely with Virgin management to build a stronger, more profitable and competitive Virgin Australia, and we look forward to the future with confidence,” he commented.

So far, Bain Capital representatives have committed to honour existing Virgin Australia employee entitlements.

Looking ahead, executives at Virgin Australia have stated the airline will operate as a more affordable carrier. However, the airline will resume flights with a smaller fleet than before. Estimations by Virgin point towards 30 to 60 Boeing 737s in rotation in 2021.

Nevertheless, 3000 staff cut have been cut from the airline’s roster after it scrapped the low-budget Tigerair.

“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,” Virgin Australia Chief Executive Paul Scurrah said on Friday.

“While we can feel very proud that we have got to this point, the impact of COVID-19 remains very challenging for our business and industry. These are tough times and we must remain focused and adapt to this new environment,” he continued.

“It’s been an incredibly tough journey for our people and they should be commended for how they have handled themselves. I’m pleased today gives us some more certainty around the company’s future,” Paul stated.

Before Bain Capital officially buys Virgin Australia, a number of court procedures will take place between now and the end of October.

Virgin Australia last trade for 8.6 cents per share on the ASX in mid-April.

VAH by the numbers
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