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Virgin Australia Holdings Ltd’s unsecured creditors will receive an average return of 9-13 percent of their funds as part of U.S. private equity group Bain Capital’s proposed purchase of the airline, administrator Deloitte said in a report today, Reuters reported. The unsecured creditors include 6,500 bondholders who are owed A$2 billion ($1.43 billion) by the country’s second-biggest airline and will receive a return of 8.9 percent to 13.3 percent, less than the 14.4 percent return for critical suppliers. Priority creditors and employees will receive 100 percent of funds owed, the report said. The Bain deal will be voted on at a meeting of creditors on Sept. 5. Creditors were owed around A$7 billion when the airline in April entered voluntary administration, Australia’s closest equivalent to the U.S. chapter 11 bankruptcy process. Unsecured bondholders Broad Peak and Tor Investment Management on Friday withdrew plans to propose a rival debt-to-equity recapitalization deal they had said would provide a higher return, leaving the Bain deal as the only real option apart from liquidation. Deloitte said in a statement that Bain’s total financial commitment was around A$3.5 billion, which includes all employee entitlements paid, all customer travel credits honored, assumption of a significant portion of secured debts and aircraft lease liabilities and a return to unsecured creditors.

Delta Air Lines and the union representing its pilots said on Friday they remain in talks to avoid furloughs after 1,806 pilots agreed to early retirement programs, with the airline pointing to the outlook for a pandemic recovery as key to its final decision, Reuters reported. In a memo to pilots, Delta’s head of flight operations John Laughter said that there had been “additional changes to travel demand and recovery forecasts” in recent weeks that the airline is assessing as it charts a path for a multi-year recovery. Delta will communicate more this week, he said, without providing more details. A Delta spokesman said “furloughs remain a last resort and we continue to stay engaged with ALPA to find a way to spread the flying among the pilots to reduce or avoid furloughs altogether.” Delta had sent warnings of potential furloughs to 2,258 pilots, the Master Executive Council (MEC) of the Air Line Pilots Association (ALPA) said in a statement, adding it hoped for additional voluntary options for pilots similar to programs at other major carriers.

German Efromovich, a majority shareholder of Avianca Holdings, said on Friday that he is innocent of alleged corruption under investigation by Brazilian prosecutors and hopes to win back control of the Colombian airline, Reuters reported. Efromovich and his brother, Jose, were placed under house arrest in Brazil earlier this week as part of the country’s massive Car Wash corruption probe. Protesting his innocence in a virtual press conference, Efromovich said he remained a willing investor in Avianca, as the air carrier undergoes a chapter 11 restructuring in the U.S. after filing for bankruptcy protection in May. Brazilian prosecutors have accused the brothers of laundering money and bribing public officials in order to land ship-building contracts with Transpetro, the logistics unit of Brazilian oil company Petrobras. The accusations are unrelated to Avianca.

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 on Friday, 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 last 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.

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.

Mexican carrier Aeromexico, which filed for chapter 11 protection in the U.S. at the end of June, said it has reached an agreement with the holders of its short term stock certificates, Reuters reported. Aeromexico said in a statement on Tuesday that holders of its AEROMEX01119, AEROMEX01219, AEROMEX00120 and AEROMEX00220 stock certificates agreed to a “waiting period” of up to 12 months during which they will not require payments from Aeromexico. “As part of the agreement reached, Aeromexico agreed to recognize the outstanding debt under the instruments through the formal restructuring process under chapter 11 (and) provide information on the progress of the restructuring process,” said the firm.

Sweden’s Debt Office said today that it has refused a state credit guarantee for Norwegian Air, renewing liquidity concerns for the struggling airline amid the coronavirus crisis, Reuters reported. Norwegian Air was already facing financial difficulties before the pandemic hit and Sweden has stipulated its credit guarantees, under a programme mitigating the impact of COVID-19, can only be granted to airlines assessed to have been financially viable on the last day of 2019. “The Debt Office’s assessment in regard to Norwegian is that as of 31 December 2019 there was a very high risk that Norwegian would not be able to fulfil its financial commitments and that the company was not deemed capable then of managing further indebtedness,” it said in a statement. “Therefore, the company has not been considered financially viable as of 31 December 2019. Accordingly, Norwegian’s application has been denied.” While there will be no immediate impact on the airline, it has indicated it would need more cash to rebuild after the coronavirus crisis hit its operations hard. The group received emergency financial guarantees from the Norwegian government in May, but only after raising cash from owners and forcing creditors to convert part of the debt to equity.

Alaska's largest rural airline filed a motion in a Delaware bankruptcy court yesterday requesting approval to issue as much as a quarter of a million dollars to current and former employees as the company sells its assets, The Hill reported. RavnAir Group in a court filing justified the proposed bonuses by noting that sale of the company's assets is expected to bring in $55 million, far more than was previously expected, and pointed to the work the current and former executives had done to complete the sale. The company's current CEO, Dave Pflieger, is among those listed to receive bonus money, but it was unclear how much he could get. The airline wants to split $250,000 in proposed bonus money between Pflieger and other employees. If approved, the bonuses would come even as the executives have faced questions as to why some of the airline's larger aircraft were sold to a California-based company at a lower price than was being offered by some competitors.

Mexican carrier Aeromexico, which filed for chapter 11 protection in the United States at the end of June, said yesterday that it has lined up $1 billion in debtor-in-possession financing with Apollo Global Management Inc., Reuters reported. The DIP facility consists of two tranches and can only be used for certain expenses, including working capital expenses, general corporate purposes and restructuring costs. The DIP facility, still subject to bankruptcy court approval and other agreements, will provide Aeromexico with liquidity to meet its future obligations in a timely and orderly fashion, and to continue with operations during and after the restructuring process, the firm said.

At least 202 aviation companies double-dipped into federal programs designed to prop up struggling businesses during the coronavirus pandemic — to the tune of about $1 billion, according to a Washington Post review of federal data. The companies include a Chicago catering firm under investigation by Democrats in Congress for laying off almost 900 workers this spring; an Ohio aircraft maintenance business that closed an office and put 52 people out of work just days after securing a loan of at least $5 million under one of the programs; and a Wisconsin airline that has warned of hundreds of temporary layoffs come fall. Earlier this month, the Office of the Special Inspector General for Pandemic Recovery, a new government watchdog, questioned the practice of letting companies benefit from both programs, saying that it “was not obvious” why airlines in particular would need help twice over and that it planned to monitor the issue. “Creating multiple programs resulting in multiple forms of financial support to a single individual or entity may well be sound policy,” the inspector general’s office wrote. “But in such circumstances, the risk of fraud and abuse increases and questions arise.” In March, Congress created the Paycheck Protection Program, which provided forgivable loans to small businesses of all kinds. But lawmakers also singled out the aviation industry for special help through grants known as the Payroll Support Program. All told, companies are in line for $700 million under the aviation program, receiving grants based on their payroll for a six-month period last year. The loans in the small-business program are worth at least $186 million.