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UPDATE 1-Virgin Australia’s unsecured creditors to get 9-13% return under Bain deal – administrator

Virgin Australia Holdings Ltd’s unsecured creditors will receive an average return of 9-13% of their funds as part of U.S. private equity group Bain Capital’s proposed purchase of the airline, administrator Deloitte said in a report on Tuesday. The unsecured creditors include bondholders who are owed A$2 billion ($1.43 billion) by the country’s second-biggest airline. Priority creditors and employees will receive 100% of funds owed, the report said. Unsecured bondholders Broad Peak and Tor Investment Management on Friday withdrew plans to propose a rival debt-to-equity recapitalisation deal they said would provide a higher return, leaving the Bain deal as the only real option apart from liquidation. The Bain deal will be voted on at a meeting of creditors on Sept. 5. Creditors were owed around A$7 billion when the airline in April entered voluntary administration, Australia’s closest equivalent to the U.S. Chapter 11 bankruptcy regime. Deloitte said its investigations found no breach of directors’ duties before the airline entered administration, which it said was driven by a catastrophic reduction in capacity in response to Australia’s travel restrictions put in place due to the coronavirus pandemic. Under Bain’s business plan, Virgin plans to cut a third of its workforce as part of an overhaul to focus on being a domestic and short-haul international Boeing Co 737 operator. Virgin’s fleet consists of 144 planes, 44 of which are owned and 100 leased or financed, but some of the leased planes will be returned to lessors, Deloitte said. ($1 = 1.3961 Australian dollars) (Reporting by Jamie Freed; Editing by Himani Sarkar and Sam Holmes) Our Standards:The Thomson Reuters Trust Principles.0 : 0narrow-browser-and-phonemedium-browser-and-portrait-tabletlandscape-tabletmedium-wide-browserwide-browser-and-largermedium-browser-and-landscape-tabletmedium-wide-browser-and-largerabove-phoneportrait-tablet-and-aboveabove-portrait-tabletlandscape-tablet-and-abovelandscape-tablet-and-medium-wide-browserportrait-tablet-and-belowlandscape-tablet-and-belowAppsNewslettersAdvertise with UsAdvertising GuidelinesCookiesTerms of UsePrivacyDo Not Sell My Personal InformationAll quotes delayed a minimum of 15 minutes. See here for a complete list of exchanges and delays. © 2020 Reuters. 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to receive 100% returnu003c/pu003enu003cpu003e* Bain deal will be put to vote on Sept. 5u003c/pu003enu003cpu003e* Administrator found no breach of directorsu0027 dutiesn(Adds details of creditoru0027s vote, administrator findings)u003c/pu003enu003cpu003eBy Jamie Freedu003c/pu003enu003cpu003eSYDNEY, Aug 25

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