NEW DELHI: It’s official now. IndiGo founder-promoter Rahul Bhatia — India’s biggest and only cash-rich airline baron — is planning to acquire bankrupt Virgin Australia. Bhatia’s conglomerate InterGlobe Enterprises on Friday confirmed it has signed an agreement to participate in the sale process (of Virgin Australia) and is bound by the confidentiality requirements of that agreement.
“We are unable to say anything further at this stage,” the airline said.
This is the first time an Indian carrier is bidding for an airline abroad. So far foreign carriers have invested in Indian carriers — either existing ones like erstwhile Jet or for JV startups like Vistara and AirAsia India.
Friday morning saw the entire spectrum of Indian airlines. While Bhatia’s InterGlobe confirmed eying Virgin Australia (VA), a mid-size airline’s management told employees on a weekly call that the “company may not survive”. IndiGo is the only airline with cash reserves.
Incidentally, Friday is the first deadline to submit bids for VA, Australia’s second largest airline which went bankrupt last month amid the coronavirus pandemic. VA stakeholders include Abu Dhabi-based Etihad, Singapore Airlines and Richard Branson’s Virgin Group.
VA has appointed a team of Deloitte administrators to “recapitalise the business and ensure it emerges in a stronger financial position on the other side of the Covid-19 crisis”. This came after Australia refused its request for a $888 million loan. Among the others eying VA are Australian PE firm BGH Capital, global investment giants Bain Capital, Brookfield and Oaktree Capital Management, Macquarie Group and three Australian states — Queensland, NSW and Victoria.
VA’s total liabilities are close to $7 billion. Morgan Stanley and Houlihan Lokey are conducting the deal for VA’s administrators. So far, 20 likely bidders have evinced interest.