Mining magnate Andrew Forrest planning a Virgin Australia takeover

Australian mining magnate Andrew Forrest is planning a bid for Virgin Australia after the failing airline fell into administration last week.The former chief executive of Fortescue Metals and one of the country’s richest men is seeking the advice of investment bank Credit Suisse, weighing up the possibility of a consortium taking over the carrier, according to the Australian Financial Review.
The report also revealed the businessman, nicknamed Twiggy, was approached by the airline earlier in the month to become an investor before it fell into insolvency and handed over its books to Deloitte.
Virgin Australia was placed into administration last week with debts of up to $6 billion but is expected to fetch a hefty sale price well into the billions.
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Mr Forrest is worth nearly $8 billion through a fortune mainly accumulated through his stake in Fortescue Metals as well as his Western Australian investment group Minderoo.
News.com.au has contacted the businessman for comment.
Deloitte’s Vaughan Strawbridge, who is in charge of the administration of Virgin Australia, told reporters last week there were more than 10 suitors who have expressed interest in taking over the nation’s second airline, which is critical in ensuring competition for consumers.
Those revealed to be considering a bid include the Macquarie Group and a handful of private equity firms.
“There are a number of very sophisticated parties who have got the capability to be part of the restructure of the company,” he said.
“We plan to run that process very hard with our advisers in order to make sure that that process is as short a period of time as possible.
“We are calling for expressions of interest, which we expect we will receive within the next couple of weeks.”
About 16,000 jobs have been left in limbo, however the administrators say there are no plans for redundancies.
“This is a tough day for our airline … (but) we’re certainly not collapsing,” Virgin Australia chief executive Paul Scurrah said at the time the decision was made to hand of the books to Deloitte.
The slump into insolvency came after the Federal Government refused a $1.4 billion bailout to help the airline survive the pandemic, with Mr Scurrah saying COVID-19 had triggered the worst aviation crisis in history.
“The events of the past 24 hours have been incredibly challenging for the wonderful people of the Virgin Australia Group,” he said at a press conference last week.
“It has been a necessary decision made by our board, brought on by an unprecedented global pandemic, COVID-19. This is not just something that is hurting Virgin Australia. We know it’s hurting the industry globally and is the worst aviation crisis we’ve ever seen in our history. We’re not immune to that.”
He added: “We’ll come back leaner, stronger and fitter, and play our role in making sure that the economy of Australia – which is currently devastated by the impact of COVID-19 – recovers as quickly as it possibly can for all Australians.”
Virgin Australia employs about 10,000 people directly and supports about 6000 other jobs indirectly.
Mr Scurrah said the company was working to preserve as many jobs as possible.