Virgin sale brings bad news for airline’s shareholders
VIRGIN Australia investors are unlikely to receive any cash for their shares after the airline entered into a sale agreement with private firm Bain Capital on Friday.
Deloitte Administrators for Australia's second-largest carrier told shareholders they are unlikely to receive any distribution for their shares held.
In a statement to the ASX this morning administrators, led by Vaughan Strawbridge, said "we do not expect there will be sufficient recoveries to repay creditors in full".
"We have reasonable grounds to believe that there is no likelihood that shareholders of VAH will receive any distribution for their shares," the statement said.
Shares in the airline were halted from trade on April 9 at 8.6c.
Bain Capital's purchase will privatise the airline, leaving many mum and dad investors at a loss.
Bondholders had lodged an eleventh-hour proposal to Deloitte to recapitalise the airline and list it on the ASX as a public company operated by Australians.
The group said Deloitte's decision to allow Bain to purchase Virgin was disappointing for the airline's employees, creditors and retail bondholders."
"The inevitable outcome of the Bain proposal is that investors are left with a very poor recovery, which is a manifestly unjust outcome," a group spokesman said on Friday.