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.