Industry

IndiGlobe eyes Virgin Australia

Air pocket: Virgin Australia had piled up a debt of more than $7 billion with very little cash for operations.

Air pocket: Virgin Australia had piled up a debt of more than $7 billion with very little cash for operations.   | Photo Credit: AFP

IndiGo Airlines, till recently, had denied any role in bid for grounded carrier

InterGlobe Enterprises Ltd., which owns over 37% stake in IndiGo Airlines, has submitted a bid to acquire Virgin Australia airlines, which had filed for bankruptcy protection on April 21, 2020 after going down with an over $7 billion debt and a very little amount of cash.

“As regards Virgin Australia, InterGlobe Enterprises has signed an agreement to participate in the sale process, and is bound by the confidentiality requirements of that agreement,” an InterGlobe Enterprise spokesperson said.

“We are unable to say anything further at this stage,” the spokesperson added.

Virgin Australia, founded as Virgin Blue in 2000 by British billionaire Sir Richard Branson, was one of the first casualties of COVID-19 that caused large scale grounding of aircraft as different countries imposed travel restrictions.

Deloitte is conducting the bids and reportedly eight bidders, including InterGlobe, have submitted bids by Friday.

The rest include Brookfield, Queensland’s investment firm QIC, private equity firm BGH Capital, Bain Capital, and mining baron Andrew Forrest. The three top bidders will be short-listed next week.The airline, Australia’s second largest, has a fleet of 98 aircraft and used to operate to 56 destinations before it went down.

Existing shareholders

Its existing shareholders include China’s Nanshan Group, HNA Group, Singapore Airlines, Etihad Airways and Sir Branson’s Virgin Group with 10% equity stake.

IndiGo started commercial operations in 2007, and since then has emerged as India’s biggest airline with nearly 50% domestic market share. IndiGo is one the world’s best run low-cost profitable airlines. It had recently denied any role in the bid.

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Printable version | Jun 7, 2020 9:58:59 AM | https://www.thehindu.com/business/Industry/indiglobe-eyes-virgin-australia/article31596224.ece

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