Virgin Australia Holdings Limited, ACN 100 686 226 and ...

Insolvency Practice Schedule (Corporations)

75-15(2)

CORPORATIONS ACT 2001

STATEMENT IN WRITING OF POSTING OF NOTICE OF MEETING

Virgin Australia Holdings Limited, ACN 100 686 226

and certain entities listed in Schedule A

(all Administrators Appointed)

(the Companies or Virgin)

I Erin Blake, of Deloitte Financial Advisory Pty Ltd, Level 23, Riverside Centre, 123 Eagle St, Brisbane QLD 4000

state:

1.

On 22 April 2020 an Initial Notice to Creditors, marked as Annexure A, was sent by email to each of the

recipients detailed in Annexure B.

2.

The circular was sent to each of the recipients with known email addresses, listed in Annexure B.

DATED this 22nd day of April 2020.

Erin Blake

Deloitte Financial Advisory Pty Ltd

Level 23, Riverside Centre

123 Eagle St

Brisbane QLD 4000

Schedule A ¨C Virgin Group entities, all Administrators Appointed

Virgin Australia Holdings Ltd, ACN 100 686 226

Virgin Australia International Operations Pty Ltd, ACN 155 859 608

Virgin Australia International Holdings Pty Ltd, ACN 155 860 021

Virgin Australia International Airlines Pty Ltd, ACN 125 580 823

Virgin Australia Airlines (SE Asia) Pty Ltd, ACN 097 892 389

Virgin Australia Airlines Holdings Pty Ltd, ACN 093 924 675

VAH Newco No.1 Pty Ltd, ACN 160 881 345

Tiger Airways Australia Pty Limited, ACN 124 369 008

Virgin Australia Airlines Pty Ltd, ACN 090 670 965

VA Borrower 2019 No. 1 Pty Ltd, ACN 633 241 059

VA Borrower 2019 No. 2 Pty Ltd, ACN 637 371 343

Virgin Tech Pty Ltd, ACN 101 808 879

Short Haul 2018 No. 1 Pty Ltd, ACN 622 014 831

Short Haul 2017 No. 1 Pty Ltd, ACN 617 644 390

Short Haul 2017 No. 2 Pty Ltd, ACN 617 644 443

Short Haul 2017 No. 3 Pty Ltd, ACN 622 014 813

VBNC5 Pty Ltd, ACN 119 691 502

A.C.N. 098 904 262 Pty Ltd, ACN 098 904 262

Virgin Australia Regional Airlines Pty Ltd, ACN 008 997 662

Virgin Australia Holidays Pty Ltd, ACN 118 552 159

VB Ventures Pty Ltd, ACN 125 139 004

Virgin Australia Cargo Pty Ltd, ACN 600 667 838

VB Leaseco Pty Ltd, ACN 134 268 741

VA Hold Co Pty Ltd, ACN 165 507 157

VA Lease Co Pty Ltd, ACN 165 507 291

Virgin Australia 2013-1 Issuer Co Pty Ltd, ACN 165 507 326

737 2012 No.1 Pty. Ltd, ACN 154 201 859

737 2012 No. 2 Pty Ltd, ACN 154 225 064

Short Haul 2016 No. 1 Pty Ltd, ACN 612 766 328

Short Haul 2016 No. 2 Pty Ltd, ACN 612 796 077

Short Haul 2014 No. 1 Pty Ltd, ACN 600 809 612

Short Haul 2014 No. 2 Pty Ltd, ACN 600 878 199

VA Regional Leaseco Pty Ltd, ACN 127 491 605

VB 800 2009 Pty Ltd, ACN 135 488 934

VB Leaseco No 2 Pty Ltd, ACN 142 533 319

VB LH 2008 No. 1 Pty Ltd, ACN 134 280 354

VB LH 2008 No. 2 Pty Ltd, ACN 134 288 805

VB PDP 2010-11 Pty Ltd, ACN 140 818 266

3

Deloitte Financial Advisory Pty Ltd

ACN 611 749 841

Level 23, Riverside Centre

123 Eagle Street

Brisbane, QLD, 4000

Australia

Phone: +61 7 3308 7000

.au

Initial circular to creditors

21 April 2020

Dear Sir / Madam

Virgin Australia Holdings Limited, ACN 100 686 226

and certain entities listed in Schedule A

(all Administrators Appointed)

(the Companies or Virgin)

Notice of Appointment and First Meeting of Creditors

Vaughan Strawbridge, John Greig, Sal Algeri and Richard Hughes were appointed Joint and Several

Administrators (Administrators) of Virgin on 20 April 2020, pursuant to the provisions of Section 436A of

the Corporations Act 2001 (Act).

Velocity Frequent Flyer, while owned by Virgin, is a separate company and is not in administration.

As the Administrators:

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we assume responsibility for the business and operations of Virgin. Subject to the various COVID19 restrictions that are in place, we intend to continue trading Virgin¡¯s business whilst we

undertake a process to recapitalise the business to bring it out of administration as soon as

possible

Houlihan Lokey, who were appointed by Virgin prior to our appointment to seek a recapitalisation

of Virgin, will be retained to continue this work with management and the Administrators

we are responsible for dealing with the staff and suppliers of the business in respect to the

ongoing trading of the business from the date of our appointment.

Whilst we assume responsibility for the business, Paul Scurrah and the Virgin management team will

continue to be in charge of the operations of the business, with support from our team and us. We are

working with management to support the review and roll out role of Virgin¡¯s strategic plans to provide the

platform for enhanced profitability and viability of Virgin when COVID-19 impacts break.

In respect of Houlihan Lokey¡¯s appointment, a number of parties have already registered their interest in

being involved in seeing Virgin come through this process as a restructured financially secure business,

which can re-commence normal operations as soon as possible as the COVID-19 pandemic allows.

We are committed to working with the Virgin and Houlihan Lokey team to ensure the success of this

process which is intended to continue the employment of the majority of the current 10,000 strong Virgin

team, whilst obtaining the best outcome for all stakeholders.

We will update you as this work progresses and on the expected timetable for the recapitalisation. All

communication should continue through existing reporting lines within the Virgin team.

Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited (¡°DTTL¡±), its global network of member firms, and their related entities. DTTL (also referred to as

¡°Deloitte Global¡±) and each of its member firms and their affiliated entities are legally separate and independent entities. DTTL does not provide services to clients.

Please see about to learn more.

Deloitte is a leading global provider of audit and assurance, consulting, financial advisory, risk advisory, tax and related services. Our network of member firms in more

than 150 countries and territories serves four out of five Fortune Global 500?companies. Learn how Deloitte¡¯s approximately 286,000 people make an impact that

matters at .

Liability limited by a scheme approved under Professional Standards Legislation.

Member of Deloitte Asia Pacific Limited and the Deloitte Network.

Declaration of Independence, Relevant Relationships and Indemnities (DIRRI)

We attach our DIRRI at Annexure A. The DIRRI discloses information regarding our independence, any

prior personal or professional relationships that the Administrators and Deloitte had with Virgin or related

parties and any indemnities received relating to this appointment.

First Meeting of Creditors

The first meeting of creditors has been convened for:

Date

Thursday, 30 April 2020

Meeting time

11:00 AM (AEST)

This meeting will only be held virtually to adhere to government policies in place due to COVID-19.

That is, no physical meeting place will be available. Further details regarding on how to participate at the

meeting will be provided in due course.

The purpose of this meeting is to consider:

1.

2.

our appointment

whether to appoint a Committee of Inspection.

Attendance at meeting

Attendance at this meeting is not compulsory.

Due to COVID-19 restrictions we require all creditors to provide documentation via email.

Should you wish to attend the virtual meeting and you would like to vote, you must complete the relevant

the forms by email by close of business on Tuesday, 28 April 2020 to either:

Creditor type

Email

Bond and note holders

virginadmin@.au

Trade creditors & suppliers

virginsuppliers@.au

Employees

virginemployees@.au

Customers

virgincustomers@.au

Otherwise, you may be considered an observer and you will not be able to vote.

Forms to complete for meeting and making a claim

Please refer to Annexure B for all attendance details and relevant forms to complete. Creditors should

note this meeting is not compulsory.

Committee of Inspection (COI)

At the first meeting, creditors will consider whether a COI should be appointed.

The role of a COI is to consult with the Voluntary Administrators and receive reports on the conduct of the

administration. A COI can also approve the Voluntary Administrators¡¯ fees. Additional details are disclosed

in ARITA Information sheet ¨C Committees of inspection at Annexure G.

Given the number of creditors of the Companies, it is our opinion that a COI would be useful to assist with

the conduct of the voluntary administration of the main operating and employing entities:

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Virgin Australia Airlines Pty Ltd

Tiger Airways Australia Pty Ltd

Virgin Australia Regional Airlines Pty Ltd

Virgin Australia International Airlines Pty Ltd

Virgin Australia Holdings Ltd.

Should you wish to be a COI member or would like to nominate someone to act as a member, please refer

to Annexure J.

Second meeting of creditors

Pursuant to Section 439A of the Act, the Administrators are required to convene a further meeting of

creditors (Second Meeting) to decide the future of Virgin. The period for convening the Second Meeting is

25 business days from the date of the appointment (Convening Period).

We intend to apply to Court for an extension of the Convening Period.

We believe this is the best course of action as:

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It will give us time to negotiate with potential purchasers of Virgin, or

Alternatively, it will give us time to negotiate with stakeholders to recapitalise Virgin, and

Further time will maximise the chances of the Virgin continuing to trade.

It is our preliminary view that a sale or recapitalisation of Virgin will result in a better outcome for creditors

than liquidation. It would also allow a significant amount of the workforce to be retained and allow key

suppliers to continue supplying Virgin.

Creditors are not required to take any further action at this stage unless they object to our application to

seek an extension to the Convening Period.

We will advise creditors and employees of the outcome of the application to Court.

Voluntary administration

In accordance with Section 435A of the Act, the primary objective of voluntary administration is to provide

for the business, property and affairs of an insolvent company to be administered in a way that:

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maximises the chances of the company, or as much as possible of its business, continuing in

existence; or

if it is not possible for the company or its business to continue in existence ¨C results in a better

return for the company¡¯s creditors and members than would result from an immediate winding up

of the company.

Attached at Annexure E is Information sheet ¨C Voluntary administration: A guide for creditors.

Creditors¡¯ rights

Attached at Annexure F is Information Sheet - Creditor Rights in Voluntary Administration.

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