Virgin Australia administrator to hold first creditors’ meeting on April 30 By Reuters

SYDNEY (Reuters) – Virgin Australia Holdings Ltd’s (AX:) administrators said they will hold a first meeting of creditors on April 30 and have retained Houlihan Lokey to advise them on restructuring the airline.

Virgin on Tuesday entered voluntary administration in an attempt to restructure its crippling A$5 billion ($3.2 billion) debt load as it struggles with a lack of demand due to the coronavirus pandemic.

More than 10 parties have already expressed interest in restructuring the country’s second-biggest airline, Vaughan Strawbridge, one of the four partners from Deloitte who were appointed as administrators, said on Tuesday.

Australian private equity group BGH Capital is among the interested parties, two people familiar with the matter have told Reuters on condition of anonymity. BGH declined to comment.

Houlihan Lokey had been advising Virgin on recapitalization options prior to the appointment of an administrator.

As of Dec. 31, Virgin had A$1.8 billion of unsecured bonds.

Nomura’s credit trading desk said it valued the company at A$2.3 billion as a going concern under a restructuring that maximizes its valuation, which would value the unsecured bonds at around 20-25% of the issue price.

Under a liquidation scenario, bondholders would only get around 10% of the issue price or less, Nomura said.

The airline’s entry into administration could give any successful bidder the chance to free it from a complex ownership structure that has slowed decision making and been blamed for years of losses.