Virgin Australia suspended trade to resume talks on rescue package Instant news

SYDNEY (Reuters) – Virgin Australia Holdings Limited lacks money (VAH.AXon suspended on Thursday trading its shares to continue talks on financial aid and restructuring alternatives to help it overcome the Corona virus crisis.

File Image: The Virgin Australia Airlines plane took off from Kingsford Smith International Airport in Sydney, Australia, March 18, 2020. Reuters / Lauren Elliot / Photo file

Australia’s second largest airline said the discussion was kept confidential and incomplete. No other details are provided, including the identity of those they spoke with.

The trade will be suspended for up to seven days, extending the trade moratorium since Tuesday.

Virgin has yet to successfully request the Australian government for A $ 1.4 billion ($ 883.54 million) of loan that can be converted into shares in certain circumstances.

The opposition Labor Party supports the government’s lifeline to Virgin, which is foreign owned by more than 90%, while its competitor Qantas Airways Ltd (QAN.AX) said government support should be provided to both operators.

“We want to see two airlines in the local market, but we are not working in the area of ​​owning an airline,” Australian Treasury Secretary Josh Friedenberg said on the Nine TV network on Thursday.

Virgin is also in talks with creditors about debt restructuring options such as debt-to-equity exchanges, and has used UPS, Morgan Stanley, Hollyhan Locky and Deloitte as advisers, according to someone familiar with the matter.

An unauthorized person speaking publicly said that entering voluntary management is the last resort, but the airline believes a decision on government assistance is needed next week.

Qantas will have an effective monopoly in the Australian market if Virgin disappears. Analysts said it would be difficult for the new airlines to obtain financing due to the current drop in demand and approval of aviation regulations that might take about a year to be accepted.

Air New Zealand Ltd (AIR.NZ), licensed to operate in the Australian domestic market, sold its shares to Virgin in 2016.

The New Zealand carrier is focusing on its own survival plan, including a permanent 30% reduction in its workforce, rather than entering the Australian market, according to someone with knowledge of the problem not authorized to speak to the media.

“We have no plans to operate local services in Australia,” a New Zealand Airlines spokesman said on Thursday.

($ 1 = A $ 1.5845)

A report by Jimmy Fred, an additional report by Byron Kay. Edited by Shri Navaratnam and Jane Wardell

Our standard: the Thomson Reuters Trust principles.

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