Virgin Australia’s administrator to shortlist two bidders early next week

FILE PHOTO: A Virgin Australia Airlines plane takes off from Kingsford Smith International Airport in Sydney, Australia, March 18, 2020. REUTERS/Loren Elliott/File Photo

SYDNEY/HONG KONG (Reuters) – The administrator of Virgin Australia Holdings Ltd (VAH.AX) said it expected to shortlist two preferred bidders early next week after parties confirmed non-binding indicative proposals to acquire the airline on Friday.

Brookfield Asset Management, which pulled out of the first bidding round and was not on the initial shortlist of four, submitted a proposal on Friday with the encouragement of administrator Deloitte and unions, a source with knowledge of the matter told Reuters on condition of anonymity.

Brookfield declined to comment, while Deloitte did not respond immediately to a request for comment.

The four on the initial shortlist included BGH Capital, Bain Capital, Indigo Partners and Cyrus Capital Partners, Reuters had previously reported.

Deloitte, the administrator, said in a statement that the next phase for the two parties on the final shortlist would include further engagement with stakeholders and aircraft financiers as they seek agreements on future terms before binding bids are received.

Binding offers are due on June 12.

The Australian Financial Review (AFR) on Friday said, without citing sources, that the bidders were likely to place an enterprise value of A$3.5 billion (1.89 billion pounds) to A$4 billion on the airline.

Deloitte said such figures were “just speculation” and the value would not be known until binding offers were required.

Virgin owed nearly A$7 billion to creditors when it entered voluntary administration last month.

Reporting by Jamie Freed and Paulina Duran in Sydney and Scott Murdoch in Hong Kong; Editing by Clarence Fernandez and Himani Sarkar

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