In a shock move, New York-based Cyrus Capital Partners has withdrawn its bid for Virgin Australia, citing a lack of engagement by the airline’s administrator Deloitte.
However, it says it is willing to reinstate it under certain conditions.
Cyrus and Bain Capital are the final two bidders for Virgin Australia although there was a wildcard bid from the airline’s bondholders on Wednesday.
Industry sources suggest that Bain is the front runner despite Cyrus appearing to offer more for the airline’s staff.
In a statement, Cyrus said it is willing to reinstate its offer if Deloitte agreed to re-engage in good faith with a view to concluding a transaction.
Cyrus has a long association with the Virgin brand, being the financial backer for Virgin America.
In s statement Cyrus said, that the administrator had failed to return its calls.
“On the morning of 22 June 2020, Cyrus presented to the administrators of Virgin Australia Holdings an offer to acquire the airline, its regional business and the frequent flyer program Velocity, in accordance with the administrators’ procedures,” it said in a statement.
“However, since then, the administrators have not returned calls, emails, or meaningfully engaged with Cyrus to progress its offer.”
Cyrus had also presented a further package of value improvements and other compelling measures to sweeten the deal, including for unsecured bondholders, but it claims there was no engagement.
Cyrus founder and chief investment officer Stephen Freidheim said “I am disappointed that it has become necessary to withdraw our offer.”
However, he has left the door open.
“Cyrus firmly believes that the Australian aviation industry has a bright future and would be willing to re-instate our offer if the administrators agree to re-engage in good faith, productive discussions with a view to concluding a transaction that will benefit all key stakeholders — employees, customers, Velocity members and bondholders,” he said
Deloitte told AirlineRatings.com it would make a statement later today.
The administrator has planned to select a preferred bidder by June 30.