InterGlobe Enterprises plans to bid for bankrupt Virgin Australia

The Rs3,010 crore IndiGo IPO, which closed on 29 October, was subscribed 6.14 times, as financial institutions and high networth individuals sought to tap the world’s fastest growing aviation market through the issue. Photo: Mint

InterGlobe Enterprises (IGE) Pvt. Ltd, which controls the company that operates India’s largest airline, has expressed interest in bidding for bankrupt airline Virgin Australia Holdings Ltd in the first round of a sale process that concluded on Friday, said a person with direct knowledge of the development.

InterGlobe Enterprises (IGE) will now evaluate submitting financial bids for the airline, the person said on condition of anonymity.

This will be a rare instance of an Indian company bidding for a prominent foreign carrier, in this case Australia’s second largest after Qantas Airways. If the Rahul Bhatia-led group’s bid is successful, it will secure an asset in a lucrative market that has low taxes.

“Australia has a vibrant aviation market with relatively lower taxes than India,” said aviation analyst Mark Martin, chief executive of Martin Consulting LLC. “The IGE Group would prefer Virgin Australia over Air India, because it’s already a cost effective airline. While, whoever buys the Indian national carrier will have to put in huge investment to revive the airline and much more to bring it back to profitability.”

The airline had last month hired Deloitte to oversee its voluntary administration after the country’s government refused to bail out the debt-ridden carrier.

InterGlobe Enterprises will participate in the sale process of Virgin Australia, a company spokesperson said on Friday, without elaborating further.

“As regards (to) Virgin Australia, InterGlobe Enterprises has signed an agreement to participate in the sale process and is bound by the confidentiality requirements of that agreement. We are unable to say anything further at this stage,” the spokesperson said.

The IGE group at present holds more than a 38% stake in India’s largest domestic airline, IndiGo. However, Bhatia’s proposal does not involve IndiGo airlines.

A spokesperson of Virgin Australia also did not respond to email queries.

Other parties known to be vying for the airline include private equity firm BGH Capital, global investment giants Bain Capital, Brookfield and Oaktree Capital Management, Macquarie Group, Indigo Partners, the three Australian states of Queensland, New South Wales, and Victoria, Australian publication Financial Review had recently reported.

Several Australian media outlets on Friday reported that there are eight likely bidders for the airline, which would be shortlisted to three potential candidates by early next week, quoting Vaughan Strawbridge, Deloitte’s lead administrator for Virgin Australia.

This article was first published on livemint.com.

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.