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

SYDNEY (Reuters) – 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 6,500 bondholders who are owed A$2 billion ($1.43 billion) by the country’s second-biggest airline and will receive a return of 8.4-12.8%, less than the 14.4% return for critical suppliers.

Priority creditors and employees will receive 100% of funds owed, the report said.

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.