USA private equity group Bain Capital said on Friday it has agreed with the administrator of Virgin Australia Holdings Ltd to buy Australia's second-biggest airline for an undisclosed sum, banking on an aviation industry recovery.
Bain has entered into a sale and implementation deed with administrator Deloitte subject to minimal conditions, Deloitte said in a statement.
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.
"Bain's investment will cement our future as a major Australian carrier, secure thousands of direct and indirect jobs, and ensure we can continue to bring competition to millions of customers for many years to come".
Such a proposal, if it eventuates, could be put to the Virgin Australia creditors' meeting that will have to be held before the end of August to vote on whether to accept the Bain deal.
"This is the best possible deal we could get to secure as many jobs as possible for Queensland", he said. "We know they are committed to investing in the airline and we are thrilled to be working with them into the future", he added.
An American private equity company is likely to purchase Virgin Australia after a rival bidder pulled its offer for the crippled airline.
According to the ch-aviation fleets advanced module, Virgin Australia now operates sixty-two B737-800s along with two B737-700s and seven ATR72-600s.
Mike Murphy, an Australian-based managing director of Bain Capital, said Bain's plan for Virgin would see it return to its core strengths.
Australian Council of Trade Unions president Michele O'Neil said she understood the agreement provided 100 per cent protection for employee entitlements but would result in some job losses.
But the folks at Cyrus said they only withdrew their bid after Deloitte ghosted them, effectively nixing communications at a pivotal point in the negotiating process.
"Cyrus firmly believes that the Australian aviation industry has a bright future and would be willing to reinstate 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.
The news comes a day after Virgin's larger rival Qantas announced it would shed 20 per cent of its staff and keep another 15000 stood down for an extended period to deal with reduced travel activity.
Both airlines have struggled to cope with an unprecedented downturn in domestic travel and bans on global travel due to the pandemic.
"I don't think that it's any surprise to anyone that the outlook for the aviation sector is going to be a challenge for some time", he told Sky News.