[ad_1]
InterGlobe Enterprises, co-owner of India’s largest airline, IndiGo, has shown interest in Virgin Australia.
The sources said that IndiGo is not involved in the deal and that an InterGlobe team is overseeing the entire bidding process. The Rahul Bhatia-owned company has appointed an Autralian consultant for the process.
“The entity has accessed the data room and can carry out the process. However, no formal interest has been submitted, “one person said of InterGlobe Enterprises’ plans.
In addition to IndiGo, the group has companies in the hospitality, real estate and travel management sectors.
An Interglobe spokeswoman said the firm would not comment on market speculation about the process. A spokesperson for the airline, IndiGo confirmed in a stock exchange notification that the airline is not involved.
Virgin Australia joined the bankruptcy administration two weeks ago after lawmakers rejected financial aid during the Covid-19 pandemic for fear it would be a bailout of foreign companies that collectively own 90 percent of the shares. from the airline.
Friday, May 15 is the last date for bidders to submit their first offers to take over the airline. Clarifying Delloite, which is running the bidding process, 20 bidders have shown interest.
Those will be “non-binding indicative offers” based on full access to Virgin’s books and a detailed memorandum of sale prepared by the airline’s designated administrator, Delloite.
Etihad Airways, Singapore Airlines, the Chinese conglomerate HNA Group and Virgin Group, by British magnate Richard Branson, are among the companies that have a stake in the bankrupt airline.
Sources aware of the plan said that Interglobe management believes Virgin Australia has strong commercial potential because it is the strongest rival to mainland giant Qantas.
“A country as large as Australia cannot have Qantas as the sole airline. The Australian government has also made clear its intention to revive Virgin Australia,” said a known person.
According to Delloite’s sales pitch to potential owners of its key domestic routes, called Brisbane, Sydney and Melbourne’s ‘Golden Triangle’, which it described as “historically one of the world’s most profitable operating jurisdictions for air travel.”
The airline’s biggest liability is its $ 5 billion debt. Analysts have said that you are likely to be successful in using the management process to reduce debt and cut costs, although you may need to cut your international services and lay off staff.
It is reflected in the very public approach of Australian policymakers to save the airline which, according to local press, does not want to risk thousands of jobs, a Qantas monopoly and higher fares.
Queensland State Development Minister Cameron Dick offered Virgin $ 200 million, conditional on debt restructuring, and also to the contributing shareholders, bondholders and the federal government.
In a case where Virgin fails, Qantas is likely to emerge as a monopoly operator. “When we come out of this social, medical and economic disaster, with perhaps 15-20% unemployment, do we really want a monopoly airline?” Asked a research report from aviation consultancy CAPA.
An investment banker who was part of Jet Airways’ insolvency process said Interglobe is betting on the future potential of the Australian domestic market. “The promoter is betting on a market in difficulties where it makes the entity cheaper and has a brilliant scope to turn it around. They have a good relationship with aircraft lessors, manufacturers, vendors, employees to rewrite the airline’s balance sheet. Bhatia’s enterprising mind is taking a calculated gamble, ”the person said.
IndiGo, of which Interglobe Enterprises owns a 37% stake, is one of the richest airlines in this part of the world and, according to an analysis by BloombergIndiGo has enough to last for about a year, even if its fleet remains ashore as personnel costs drop by 30%.
.
[ad_2]
