Bain Capital agreed to buy collapsed airline Virgin Australia in one of the biggest single bets on the industry since it was shattered by the coronavirus pandemic.
Administrator Deloitte named the US private equity group as the airline’s new owner on Friday, hours after rival buyout firm Cyrus Capital Partners withdrew its bid. The value of the deal wasn’t disclosed, although Deloitte said there will be “a significant injection of capital” into the airline.
Bain's investment is a brave bet on a sector enduring its biggest crisis ever, as well as on the Virgin Australia business itself, the country's second-biggest airline. Larger rival Qantas Airways this week depicted a bleak outlook, cutting 6,000 jobs, grounding about 100 planes and raising as much as A$1.9 billion (Dh4.8bn) to survive a prolonged downturn.
While domestic travel is slowly recovering, Australia’s government has said the country’s borders could be kept largely closed until 2021. Airlines worldwide are likely to lose $84bn and see their revenues halve this year, according to the International Air Transport Association, which expects 2020 to go down as the worst year financially in the history of aviation.
Virgin Australia collapsed in April under A$6.8bn in borrowings as the outbreak halted global travel. Even before coronavirus-related restrictions nearly froze revenue, Virgin Australia had lost money for seven consecutive years.
The airline started as a low-cost domestic carrier in 2000, before destroying its balance sheet trying to compete with Qantas as a full-service operator with routes to the US and Asia.
When it went under, Virgin Australia employed about 10,000 staff and operated 144 aircraft, generating almost 80 per cent of its revenue from domestic flights. It had pushed back delivery of Boeing 737 Max jets to July 2021, when it expected to receive the first of the 48 it had on order.
Deloitte said on Friday it’s still not possible to determine how much of Virgin Australia’s debt can be recovered, though more details will come in a report to creditors that’s due before the end of August.
Deloitte’s decision ends an auction process that initially drew interest from more than 20 parties. Cyrus exited on Friday with a fiery attack on the sale process, accusing Deloitte of a “lack of engagement” since the US investment group submitted its takeover proposal on June 22.
In a separate statement, Bain said it will strengthen Virgin Australia’s regional services and continue serving business travellers. Bain is backing Managing Director Paul Scurrah, who had already started to cut costs and simplify the airline when the virus struck.
Bain’s deal may face a further challenge from Virgin Australia’s bondholders, who this week submitted their own plan to swap their debt for new shares under an independent board. The sale agreement with Bain also still needs to be approved by creditors.
“Bain put forward a solid bid,” said Michael Kaine, national secretary of the Sydney-based Transport Workers Union. “We are happy to work with them on the plan for getting the airline back on its feet.”
Virgin’s more-than 10,000 creditors include about 9,020 employees, court filings show.
In April, Prime Minister Scott Morrison’s government refused to give the airline even A$200 million to survive, tipping Virgin Australia in alongside UK carrier FlyBe as one of the world’s highest-profile corporate casualties from coronavirus.
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if you go
The flights
Emirates flies to Delhi with fares starting from around Dh760 return, while Etihad fares cost about Dh783 return. From Delhi, there are connecting flights to Lucknow.
Where to stay
It is advisable to stay in Lucknow and make a day trip to Kannauj. A stay at the Lebua Lucknow hotel, a traditional Lucknowi mansion, is recommended. Prices start from Dh300 per night (excluding taxes).
The specs: 2018 Alfa Romeo Stelvio
Price, base: Dh198,300
Engine: 2.0L in-line four-cylinder
Transmission: Eight-speed automatic
Power: 280hp @ 5,250rpm
Torque: 400Nm @ 2,250rpm
Fuel economy, combined: 7L / 100km
Milestones on the road to union
1970
October 26: Bahrain withdraws from a proposal to create a federation of nine with the seven Trucial States and Qatar.
December: Ahmed Al Suwaidi visits New York to discuss potential UN membership.
1971
March 1: Alex Douglas Hume, Conservative foreign secretary confirms that Britain will leave the Gulf and “strongly supports” the creation of a Union of Arab Emirates.
July 12: Historic meeting at which Sheikh Zayed and Sheikh Rashid make a binding agreement to create what will become the UAE.
July 18: It is announced that the UAE will be formed from six emirates, with a proposed constitution signed. RAK is not yet part of the agreement.
August 6: The fifth anniversary of Sheikh Zayed becoming Ruler of Abu Dhabi, with official celebrations deferred until later in the year.
August 15: Bahrain becomes independent.
September 3: Qatar becomes independent.
November 23-25: Meeting with Sheikh Zayed and Sheikh Rashid and senior British officials to fix December 2 as date of creation of the UAE.
November 29: At 5.30pm Iranian forces seize the Greater and Lesser Tunbs by force.
November 30: Despite a power sharing agreement, Tehran takes full control of Abu Musa.
November 31: UK officials visit all six participating Emirates to formally end the Trucial States treaties
December 2: 11am, Dubai. New Supreme Council formally elects Sheikh Zayed as President. Treaty of Friendship signed with the UK. 11.30am. Flag raising ceremony at Union House and Al Manhal Palace in Abu Dhabi witnessed by Sheikh Khalifa, then Crown Prince of Abu Dhabi.
December 6: Arab League formally admits the UAE. The first British Ambassador presents his credentials to Sheikh Zayed.
December 9: UAE joins the United Nations.
How to help
Send “thenational” to the following numbers or call the hotline on: 0502955999
2289 – Dh10
2252 – Dh 50
6025 – Dh20
6027 – Dh 100
6026 – Dh 200
THE SPECS – Honda CR-V Touring AWD
Engine: 2.4-litre 4-cylinder
Power: 184hp at 6,400rpm
Torque: 244Nm at 3,900rpm
Transmission: Continuously Variable Transmission (CVT)
0-100kmh in 9.4 seconds
Top speed: 202kmh
Fuel consumption: 6.8L/100km
Price: From Dh122,900
Terror attacks in Paris, November 13, 2015
- At 9.16pm, three suicide attackers killed one person outside the Atade de France during a foootball match between France and Germany
- At 9.25pm, three attackers opened fire on restaurants and cafes over 20 minutes, killing 39 people
- Shortly after 9.40pm, three other attackers launched a three-hour raid on the Bataclan, in which 1,500 people had gathered to watch a rock concert. In total, 90 people were killed
- Salah Abdeslam, the only survivor of the terrorists, did not directly participate in the attacks, thought to be due to a technical glitch in his suicide vest
- He fled to Belgium and was involved in attacks on Brussels in March 2016. He is serving a life sentence in France
About Seez
Company name/date started: Seez, set up in September 2015 and the app was released in August 2017
Founder/CEO name(s): Tarek Kabrit, co-founder and chief executive, and Andrew Kabrit, co-founder and chief operating officer
Based in: Dubai, with operations also in Kuwait, Saudi Arabia and Lebanon
Sector: Search engine for car buying, selling and leasing
Size: (employees/revenue): 11; undisclosed
Stage of funding: $1.8 million in seed funding; followed by another $1.5m bridge round - in the process of closing Series A
Investors: Wamda Capital, B&Y and Phoenician Funds
Three trading apps to try
Sharad Nair recommends three investment apps for UAE residents:
- For beginners or people who want to start investing with limited capital, Mr Nair suggests eToro. “The low fees and low minimum balance requirements make the platform more accessible,” he says. “The user interface is straightforward to understand and operate, while its social element may help ease beginners into the idea of investing money by looking to a virtual community.”
- If you’re an experienced investor, and have $10,000 or more to invest, consider Saxo Bank. “Saxo Bank offers a more comprehensive trading platform with advanced features and insight for more experienced users. It offers a more personalised approach to opening and operating an account on their platform,” he says.
- Finally, StashAway could work for those who want a hands-off approach to their investing. “It removes one of the biggest challenges for novice traders: picking the securities in their portfolio,” Mr Nair says. “A goal-based approach or view towards investing can help motivate residents who may usually shy away from investment platforms.”
Afro%20salons
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Company%20profile
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THE NEW BATCH'S FOCUS SECTORS
AiFlux – renewables, oil and gas
DevisionX – manufacturing
Event Gates – security and manufacturing
Farmdar – agriculture
Farmin – smart cities
Greener Crop – agriculture
Ipera.ai – space digitisation
Lune Technologies – fibre-optics
Monak – delivery
NutzenTech – environment
Nybl – machine learning
Occicor – shelf management
Olymon Solutions – smart automation
Pivony – user-generated data
PowerDev – energy big data
Sav – finance
Searover – renewables
Swftbox – delivery
Trade Capital Partners – FinTech
Valorafutbol – sports and entertainment
Workfam – employee engagement
WHAT IS A BLACK HOLE?
1. Black holes are objects whose gravity is so strong not even light can escape their pull
2. They can be created when massive stars collapse under their own weight
3. Large black holes can also be formed when smaller ones collide and merge
4. The biggest black holes lurk at the centre of many galaxies, including our own
5. Astronomers believe that when the universe was very young, black holes affected how galaxies formed
Company%20profile
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EXPATS
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