Deloitte wins prestigious international award for Virgin turnaroaund
The global Turnaround Management Association has lauded Deloitte for its work in saving Virgin Australia, the first time an Australian organisation has received the top honour.
Deloitte’s Australian Turnaround & Restructuring team has been given the ‘International Company Turnaround/Transaction of the Year’ nod by the global Turnaround Management Association for its work on rescuing Virgin Australia, which faced collapse in the early days of the Covid-19 pandemic. Appointed administrators in April of last year, the firm concluded the airline’s sale process to Bain Capital within just ten weeks.
“This is a prestigious award and global acknowledgement of the incredible work done by our people,” said Deloitte Australia CEO Adam Powick. “The team faced multiple challenges managing a rapid fire restructure and sale process that was also the subject of so much stakeholder and public interest and scrutiny. They saved a business, they saved jobs, and they have ensured Virgin Australia remains a viable and competitive force.”
The voluntary administrator engagement was led by Deloitte Turnaround & Restructuring partners Sal Algeri, John Greig, and Richard Hughes (who remain involved in the process of finalising creditor claims as Trust Administrators of the Volar Creditors’ Trust) along with Vaughan Strawbridge (now at FTI Consulting) with support from fellow partners David Orr, Matt Donnelly, Sam Marsden, Grant Sparks, Kathryn Evans, and Tim Heenan.
Further supported by an epic team of around one hundred Deloitte restructuring and insolvency specialists brought in from across Australia, the firm oversaw the airline’s operations during the onset of the global pandemic and Australia’s sudden border closures, while also undertaking a complex restructure of the airline’s business – with Virgin lumped with debts of $6.8 billion at the time.
“This was the biggest and most complex administration ever undertaken in Australia, and our work being recognised by our peers globally is humbling,” Algeri said, adding that the ‘runway’ to save Virgin was short. “Most airline restructures and administrations take many years to conclude, and many, if not most, never fly again. But in our minds, not keeping Virgin Australia flying was never an option – there was no half-way house.”
According to figures in the media, the rescue mission saved some 6,000 local jobs, with Bain Capital taking over six months after Deloitte’s appointment on the back of a $3.5 billion buy-out, and former Bain & Company partner Jayne Hrdlicka brought in to lead the rebuild. She has since recruited a number former Bain colleagues for support. Australia’s borders have been tentatively scheduled to reopen in mid-December.
“As administrators, our focus was always on the interests of creditors, but we recognised that as Australia’s only alternate national airline, it was extremely important that Virgin had the best possible opportunity to re-emerge as a viable contributor to Australia’s future,” concluded Algeri. “An airline without employees, without aircraft and without a viable loyalty business would not be the mark of a successful process and outcome.”
