Virgin shareholders will not see a cent from sale of airline
30 June 2020, Written by David Simmons
Administrators of airline Virgin Australia (ASX: VAH) have clarified that shareholders will not receive any distribution for their shares once the sale to Bain Capital is completed.
Further, administrators Deloitte have said that they do not expect there will be sufficient recoveries to repay creditors in full.
"We declare that we have reasonable grounds to believe that there is no likelihood that shareholders of VAH will receive any distribution for their shares," says Deloitte.
"Depending on individual tax circumstances, shareholders may rely on this declaration to claim capital losses in the income year in respect of their shareholdings in VAH. Shareholders should seek their independent legal and taxation advice in respect of the consequences of this declaration."
When Virgin Australia shares were suspended from quotation on 16 April shares were trading at $0.086 per share.
The most recent peak of VAH shares was back in April 2015 when shares were trading at $0.529 per share.
Virgin administrators announced on Friday that US-based private investment firm Bain Capital was selected as the successful bidder for the airline after competitor Cyrus Capital Partners pulled out at the eleventh hour.
The agreement will result in the sale and recapitalisation of Virgin Australia Holdings and its subsidiary business (VAH Group) that operates Virgin Australia and Tiger Airlines.
The transaction will be completed after the second meeting of creditors, which is currently scheduled to occur before the end of August.
Business News Australia
Author: David Simmons