Bain Capital, LP entered into sale and implementation deed to acquire business of Virgin Australia Holdings Limited (ASX:VAH) for AUD 1.7 billion on June 26, 2020. Bain Capital will also pay an earnout of AUD 124 million in two equal installments based on Virgin Australia achieving EBITDA target of AUD 1 billion for FY 2022 and AUD 1.2 billion for FY 2023. No return to shareholders is anticipated. At this stage, it is not possible to determine the estimated return to creditors however an update will be provided ahead of the second meeting of creditors. As of June 29, 2020, it is not expected that there will be sufficient recoveries to repay creditors in full. On this basis, under Section 104-145 of the Income Tax Assessment Act 1997, it is declared that there are reasonable grounds to believe that there is no likelihood that shareholders of VAH will receive any distribution for their shares. As of September 4, 2020, creditors accepted 10 separate deeds of company arrangement (DOCAs) covering all 41 of the entities in voluntary administration as proposed by BC Hart Aggregator, LP (Bain Capital). It was the Administrators opinion that approving the DOCAS was in the best interest of all creditors. The Bain Capital DOCAs, now formally approved by creditors, provides for unsecured creditors receiving between 13 and 9 cents in the dollar on their claims (from a pool of funds of between AUD 462 million and AUD 612 million), the value of all customer travel credits and prepaid flights provided post-administration, continued employment for the majority of Bain Capitalemployees and entitlements paid in full, including for those leaving the business, continuation of the Velocity Frequent Flyer program, retention of aircraft and equipment, interim funding and acceptance of economic risk by Bain from July 1, 2020. Once the DOCAs are signed the administrators will make an application to the Federal Court for the transfer of the shares in VAH to Bain Capital. The DOCAs cannot be successfully completed until the Court approves share transfer. With the transfer of shares, expected to be completed by October 31, 2020, a proposed Creditors' Trust will be created to adjudicate claims and pay distributions to the Virgin Group creditors. The Voluntary Administrators will also act as Deed Administrators of the DOCAs and then as Trustees of the Creditors Trust. The timing of the payment of the dividend being to creditors has been estimated at between six and nine months from completion of the sale transaction. Paul Scurrah will step down as Chief Executive Officer and Managing Director at financial close of the sale transaction and Jayne Hrdlicka will be appointed as his replacement.

The sale and implementation deed is subject to minimal conditions precedent such as regulatory approvals. The deal will need to be approved by 50% of creditors by value and 50% by number to be finalized. Richard Branson and the Transport Workers Union thrown their support behind Bain Capital, saying they will back the proposal in the creditors meeting. Approval by the Australian Treasurer pursuant to Australian Foreign Investment Review laws has already been received by Bain Capital. As on July 15, 2020, Federal Court warned that the sale process could be delayed or terminated if they did not meet the obligations and the creditors' meeting is scheduled for before the end of August, 2020. As of November 10, 2020, Federal Court of Australia has approved the transaction.

As on October 15, 2020, transaction is expected to close in early November, 2020. As of October 21, 2020, completion is expected on or before November 30, 2020. As of November 16, 2020, the effectuation of the Virgin Australia Holdings DOCA is scheduled to occur on November 17, 2020. As part of the implementation steps to be undertaken prior to Completion, the Deed Administrators will transfer all of the issued share capital of Virgin Australia Holdings to Bain Capital or its nominee in accordance with the 444GA order and the Virgin Australia Holdings DOCA. Virgin Australia Holdings has also requested that it be removed from the official list of the ASX from close of trading on the date of completion.

Damien Hazard, Nikki Smythe, Mark Clifton, Damien Hazard, Nikki Smythe, Mark Clifton, Hayley Neilson, John Angus, Steven Catanzariti, Siva Subramaniam and Mel Swain-Tonkin of Herbert Smith Freehills acted as legal advisor to Bain Capital, LP. Morgan Stanley (NYSE:MS) acted as a financial advisor to Virgin Australia Holdings Limited. The Goldman Sachs Group, Inc. (NYSE:GS) acted as financial advisor to Bain Capital, LP. Jefferies acted as advisor to the Queensland Investment Corporation in the deal. Morgan Stanley and Houlihan Lokey acted as financial advisor to the administrator and John Greig, Salvatore Algeri, Richard Hughes, David Orr, Grant Sparks, Tim Heenan, Matt Donnelly, Sam Marsden, Kathryn Evans and Vaughan Strawbridge of Deloitte Restructuring Services acted as administrator for Virgin Australia Holdings Limited. Deloitte will receive fees of AUD 26.8 million. Timothy Sackar of Clayton Utz acted as legal adviser for the administrator. FTI Consulting (Australia) Pty Ltd acted as independent expert for Clayton Utz.

Bain Capital, LP completed the acquisition of Virgin Australia Holdings Limited (ASX:VAH) on November 17, 2020. Bain Capital won the final bid. Bain Capital is providing interim funding of AUD 125 million and promising to take economic responsibility for the business from July 1. All of the issued share capital of Virgin Australia Holdings have been transferred to Bain Capital or its nominee in accordance with the 444GA order and the Virgin Australia Holdings DOCA.