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Virgin Australia sale: Not party to Bhatia firm's proposal, clarifies InterGlobe Aviation

The company is not a party to or involved in any proposal of InterGlobe Enterprises in relation to the sale of Virgin Australia, says InterGlobe Aviation

twitter-logoBusinessToday.In | May 18, 2020 | Updated 15:28 IST
Virgin Australia sale: Not party to Bhatia firm's proposal, clarifies InterGlobe Aviation
InterGlobe Enterprises Private Limited is a separate legal entity and a shareholder in IndiGo

Days after reports emerged that IndiGo might be interested in buying bankrupt Virgin Australia, the company has said it has not formulated any such proposal, and that it's not a party to the proposal of InterGlobe Enterprises. "The company has not formulated any indicative proposal or expressed any interest in the sale of Virgin Australia," InterGlobe Aviation told the stock exchanges.

InterGlobe Enterprises Private Limited is a separate legal entity and a shareholder in IndiGo. "The company is not a party to or involved in any proposal of InterGlobe Enterprises Private Limited in relation to the sale of Virgin Australia," InterGlobe Aviation said.

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Earlier reports said Rahul Bhatia-led InterGlobe Enterprises, which holds 38.87 per cent stake in IndiGo, had signed an agreement to participate in the Virgin Australia sale. "As regards Virgin Australia, InterGlobe Enterprises has signed an agreement to participate in the sale process and is bound by the confidentiality requirements of that agreement. We are unable to say anything further at this stage," InterGlobe said in a statement.

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Notably, Virgin Australia, the second-largest Australian carrier, announced bankruptcy on April 21 in the wake of coronavirus pandemic, thereby putting around 16,000 jobs at risk. Besides Bhatia's InterGlobe, IndiGo promoter Rakesh Gangwal's firms RG Enterprises, his family own 36.64 per cent in India's largest airline.

Cash-strapped Virgin Australia had appointed Vaughan Strawbridge of Deloitte as a voluntary administrator to lead a sales process after the Australian government rejected its plea for AU$1.4 billion loans. More than 10 parties have reportedly expressed interest in recapitalising Virgin. Virgin employs 10,000 people directly and 6,000 people indirectly. It competes with larger rival Qantas Airways Ltd, which would have a virtual monopoly in Australia if Virgin stopped flying.

The InterGlobe Aviation Ltd share was down 10.64 per cent at Rs 877.40 on intra-day trade from its previous close of Rs 984 on the NSE.

ALSO READ: Coronavirus effect: Air passenger traffic likely to log 30% negative growth in FY21, says CARE Ratings

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