Dubai Aerospace Enterprise among Virgin Australia lessors

Virgin Australia is said to owe almost 10,000 creditors A$6.9 billion. (Supplied)
Short Url
Updated 25 April 2020

Dubai Aerospace Enterprise among Virgin Australia lessors

  • The Deloitte administrators are seeking court orders for an extension of up to four weeks from their appointment to decide if leased planes are required for continuing operations of the business

SYDNEY: Virgin Australia Holdings owes A$6.9 billion ($4.39 billion) to more than 10,000 creditors based on an initial review, and will seek a three-month payment waiver from aircraft lessors, its administrators said.

Virgin said this week it succumbed to third-party led restructuring that could lead to a sale, turning Australia’s second-biggest airline into the Asia-Pacific’s biggest victim of the coronavirus crisis.
The figure owed to creditors includes about A$2.3 billion of secured debt, A$2 billion of unsecured bonds, A$1.9 billion of aircraft leases, A$450 million owed to employees, A$167 million to trade creditors and A$71 million to landlords, according to an affidavit from administrator Vaughan Strawbridge.
The bankrupt airline’s administrators are liable to pay leases on its aircraft starting April 28, because they will not inform lessors whether they would renege on leases within five business days, as required by law, the documents, posted on the website of Strawbridge’s firm Deloitte, showed.
The Deloitte administrators are seeking court orders for an extension of up to four weeks from their appointment to decide if leased planes are required for continuing operations of the business.
“Next week we will be wanting to engage with you to firm up on interim arrangements with the administrators to support the process being followed to achieve a recapitalization and sale, which will include a request for a three-month waiver of rent and other financial payment obligations,” they said in a letter.
A document released by the Federal Court of Australia showed law firm King & Woods Malleson (KWM) said it was representing 17 aircraft lessors and financiers.
These include Aercap Holdings NV, Bank of China, SMBC Aviation Capital, ORIX Aviation, GECAS, Dubai Aerospace Enterprise, Bank of America Corp. and BNP Paribas SA.
The lessors with the biggest financial exposure to Virgin include Goshawk, Avation PLC, Aercap, ORIX and SMBC, each with estimated monthly income of at least $1 million from the airline, aviation data provider Cirium said.

HIGHLIGHTS

● Airline has more than 10,000 creditors.

● Entered administration due to virus crisis.

● To seek three-month rent waiver from lessors.

KWM said its clients wanted to work with the administrators, but required them to pay for regular maintenance and insurance and report on the use of aircraft.
Perth Airport said it had seized a number of Virgin Australia aircraft that were parked there not currently conducting flights to protect the airport’s interests, given the airline had “significant” outstanding invoices.
“Perth Airport has taken liens over a number of Virgin aircraft — a standard practice in these situations,” a spokeswoman said.
Sydney Airport and Melbourne Airport said they had not seized Virgin aircraft. “We prefer to work constructively with our airline partners through this period,” a Sydney Airport spokesman said.
For now, Virgin is flying a skeleton schedule under its regular management team as administrators seek a buyer for the entire operation.
Private equity and distressed situation specialists Apollo Global Management, Oaktree Capital Management and BGH Capital are among more than 10 firms to express interest in the restructuring, Reuters has reported, citing five sources.


Bosnia enters olive oil market with award-winning ‘liquid gold’

Updated 30 October 2020

Bosnia enters olive oil market with award-winning ‘liquid gold’

LJUBUSKI, Bosnia: Blessed with sunshine, virgin land and ample ground water, southern Bosnia is breaking into the olive oil market, winning medals and helping put the country on the map for “liquid gold.”

“When I started to plant olive trees, I was told: ‘You’re crazy’,” recalls Dragan Mikulic, 65, who runs a 50-hectare orchard in Ljubuski, in Bosnia’s southern Herzegovina region.

After little over a decade, he has become one of the top olive growers in the Balkans.

Wedged between high mountains to the north and the Adriatic Sea to the south, the grove’s 7,000 trees stand in perfect rows beneath sunny skies.

“Look at this sun. It’s like this all the time. The water coming down from these mountains passes through here, on its way to the sea,” Mikulic says.

“The soil consists of 30-percent sandy earth in which the trees breathe, and 70-percent stone, rich in minerals. It’s all here.”

‘With a gracious climate, uncontaminated soil and water, Herzegovina has unimaginable possibilities for the development of olive growing.’

Miro Barbaric Agriculture expert

But it was not that easy at the start.

Recalling the “madness” of the early days, he describes having to use “tons of explosives” to break up a rocky patch of scrubland and turn it into a flat surface where he could plant the trees.

“We chose the olive because it is, as we say here, the tree of God,” adds Mikulic, whose oil in recent years has won 32 gold medals in competitions in Italy, Croatia and Bosnia.

Other producers have now followed in his footsteps.

Officially, 776 tons of olives were harvested in Bosnia last year, 27 percent more than the previous year.

The industry is still small compared to neighboring Croatia, the regional leader.

But “with a gracious climate, uncontaminated soil and water,” Herzegovina has “unimaginable possibilities for the development of olive growing,” says Miro Barbaric, an agriculture expert from the Bosnian Agro-Mediterranean Institute.

Access to underground water has only been possible over the last 15 years thanks to new drilling techniques.

But it is key to the growth of this new crop in the region, once home mainly to tobacco.

Due to the lack of rain, the olive trees need between 150 and 200 liters of water per day, according to Mikulic, who has drilled two boreholes in his olive grove and installed a drip irrigation system.

His neighbor Jure Susac, a 66-year-old winegrower who also has olive trees now, says he drilled a borehole nearly 300 meters deep.

“I know that the olive loves a lot of water. I have plenty of it. The pump never stops working,” Susac says.

“And, voila,” he adds, pointing to the bunches of plump green olives on the trees “in excellent health” in his orchard, just a few days before the October harvest.

Susac has also won medals for his trees, the majority of which are bearing olives this year.

Hailing the turnout as “exceptional,” he hopes to squeeze out more than 500 liters of oil from them.

In every competition he entered with his oil, he won the gold medal, Susac says. “We are now often ahead of the Croatians.”