Rahul Bhatia, who is the biggest shareholder in Indian budget carrier IndiGo, is considering a bid to acquire Virgin Australia Holdings Ltd., according to a report in Bloomberg.
A source with direct knowledge of the matter told the publication that Rahul Bhatia is chalking out a strategy after assessing data of the Australian airline founded by Richard Branson. However, the process is still in the evaluation stage and no decision has been finalised yet.
Rahul Bhatia owns share in Indigo through InterGlobe Enterprises Ltd.
IndiGo had denied an earlier report that it was seeking to acquire Virgin Australia. The source added that the proposal is being formulated by InterGlobe Enterprises.
Virgin Australia went bankrupt last month and owes more than $4.5 billion to over 10,000 creditors as the COVID-19 induced lockdown has stopped nearly all revenue.
The cash-strapped airline has at least 20 potential suitors lined up to acquire it as its administrator Deloitte, seeks to sell the airline within two months of its collapse. Deloitte is looking for indicative bids by Friday and binding offers in June, aiming to finalise a deal by the end of the month, Bloomberg reports.
Virgin Australia had seven consecutive losses on its books before it wound up. The Australian Financial Review states that the Indian bid plans to relaunch the airline as a low-cost carrier and bring it back to profit.
Virgin started its first flight from Brisbane to Sydney back in 2000, when it had just two aircraft and one route. The airline later converted itself into a full-service carrier under its CEO John Borghetti, who took the reins in 2010. However, a capacity war with Qantas, Borghetti’s former employer, spurred continuous losses, Bloomberg reports. Paul Scurrah who took charge from Borghetti in 2019, was envisioning a turnaround plan for the airline to cut costs and debt when the coronavirus crisis emerged and throttled all hopes of a recovery, the publication adds.