Virgin Australia Holdings Ltd bondholders have withdrawn plans for a proposed recapitalization of the airline that was meant to rival one from U.S. private equity firm Bain Capital, a spokesman for the bondholders said today, Reuters reported. Singapore’s Broad Peak and Hong Kong’s Tor Investment Management, which had proposed the rival deed of company arrangement (DOCA) to recapitalise the airline, hold around A$300 million ($216 million) of Virgin’s A$2 billion of unsecured bonds, part of nearly A$7 billion owed to creditors. A court ruling this week makes it impossible to complete due diligence and present a substantially unconditional DOCA proposal to rival Bain’s at a creditors’ meeting on Sept. 4, the spokesman for the bondholders said. Virgin Australia is in voluntary administration, the closest Australian equivalent to chapter 11 bankruptcy provisions used to restructure companies in the U.S. Administrator Deloitte plans to issue a report to creditors on Aug. 25 outlining the return they should expect under the Bain deal, which has not yet been made public.
