Wirraway From Australia, joined Mar 2001, 1321 posts, RR: 1 Posted (12 years 2 weeks 4 days 7 hours ago) and read 625 times:
By Steve Creedy, Aviation writer
November 27, 2001
VIRGIN Blue has three bidders keen to become cornerstone investors if its deal with Chris Corrigan's Lang Corp fails.
Lang has offered take a majority stake in Virgin Blue in a deal worth at least $300 million.
But this hinges on the Virgin-Lang consortium getting control of Ansett terminals, which are also part of the Fox-Lew bid.
That syndicate has yet to finalise its deal – partly because of negotiations over federal government support – but it appears, at this stage, likely to proceed.
Ansett administrators told Virgin Blue chief Brett Godfrey and Mr Corrigan yesterday they couldn't make a counter-bid because the airline was already sold to Fox-Lew.
As a result, Virgin Blue has continued negotiating with others.
Mr Godfrey acknowledged last night that the plan was essentially a back-up and depended on the Fox-Lew plan failing.
He also said Lang's stake had not yet been nailed down: "It's a bit like buying a house.
"If the financing doesn't come through, we're quite happy to put a bid in to say: 'Consider this a second proposal'."
Mr Godfrey said Virgin would win no matter what happened.
"If Corrigan invests in us and we get access to the terminals, then we grow very much more quickly.
"In other words, we get to the level of 30 per cent (of the market) and 30 airplanes sometime next year, probably about the third quarter.
"If not, we still end up with 23 airplanes, subject to no other com mitments," Mr Godfrey said. "But then we start to see creaking in the existing terminals."
He doubted Lang would remain interested if Virgin couldn't achieve the quick growth possible with access to Ansett terminals.
If Lang pulled out, Virgin would negotiate for more terminal space in Sydney, Melbourne and Brisbane.
It would also revert to its original plan of securing a cornerstone investor, probably by next February.
"By this afternoon, I think we'll have three competing bids," Mr Godfrey said yesterday.
He cast doubt on suggestions that money from any sale of a Virgin Blue stake would go to troubled sister airline Virgin Atlantic. He believed the money was still earmarked for new projects.
"Virgin got given a chunk of cash from another company that was doing reasonably well. Now we're perceived, quite rightly, as being a great vehicle to be able to do the same to some other ideas," he said.
Wirraway From Australia, joined Mar 2001, 1321 posts, RR: 1 Reply 1, posted (12 years 2 weeks 4 days 1 hour ago) and read 596 times:
Now 4 investors !!!
SYDNEY, Nov 27 (Reuters) - Discount carrier Virgin Blue said on Tuesday four potential investors were waiting in the wings to take a stake in the carrier should its deal to sell a 51 percent interest to Lang Corp Ltd disintegrate.
Chief executive Brett Godfrey told Reuters Lang would likely back away if Virgin Blue failed to meet the conditions of the deal -- snaring the assets of failed carrier Ansett Australia.
But the cut-price carrier could survive without Lang's A$300 million investment, although its growth path would be slowed.
"We're talking to other investors about taking a smaller stake. Lang was always driven by taking a controlling stake, and it was a big ticket deal for them," Godfrey said.
Tight-lipped on the identity of the potential suitors, Godfrey said some were public companies and one was "heavily involved in airlines" in the northern hemisphere.
Godfrey said none of the parties interested in buying part of British billionaire Richard Branson's discount airline was based in Asia and all were unlikely to consider a controlling interest in the carrier, which is likely to list on the Australian Stock Exchange in 2002.
"I think next year would be a perfect time to float and therefore it would probably by default cede over 51 percent to non-Virgin interests, and that's a good thing for us, it would allow us to do things like fly the Tasman," Godfrey said.
"Most of the investors, I'd say three of the four would want an exit strategy, they're like venture capitalists," he added.
The sale of a Virgin Blue stake would generate funds for Branson's mobile phone ventures in the United States, where his Virgin Group recently formed a joint venture with Sprint Corp
Unions and administrators to failed carrier Ansett gave a frosty reception to the late Virgin Blue/Lang play for the airline on Monday, concentrating instead on their previous agreement to sell Ansett to Melbourne millionaires Solomon Lew and Lindsay Fox.
Sources close to the talks say the Virgin Blue/Lang deal only realistically stood a chance if Fox and Lew withdrew their A$3.6 billion plan which would see a revamped Ansett fly Australia's main trunk routes with a fleet of 29 Airbus Industrie [ARBU.UL] planes.
Virgin Blue lays claim to around 10 percent of the domestic market in the wake of Ansett's demise, which has seen flagship carrier Qantas Airways Ltd grab up to 85 percent.
Three Boeing 737-800s and a 737-700 are due for delivery over the next few weeks to bolster Virgin Blue's existing 12 plane fleet.
Godfrey played down suggestions Virgin could struggle to compete if a revamped Ansett Mark II gets off the ground.
"I believe we've got the lowest cost of any airline in the world. For Qantas and Ansett to come down and match us, they'll haemorrhage trying," he said.
"I don't mind being positioned as the underdog ... I can tell you we're pretty confident of how we're placed and our competitive advantages to anyone in the world, let alone Ansett Mark II," he said.