IndiGo’s backflip takes shares down⁠— parent InterGlobe confirms it is looking to bid for the bankrupt Virgin Australia

• Indigo’s parent company InterGlobe Enterprises has expressed its interest in acquiring the bankrupt Virgin Australia.
• The company has said that it has signed an agreement to participate in the sale of the collapsed airline.
• IndiGo had earlier denied reports that it is interested in placing a bid for the company.

Just a few days after Indigo denied reports that it is interested in placing a bid for the collapsed airline Virgin Australia, its parent company InterGlobe Enterprises has now confirmed that it has signed an agreement to participate in the sale of the bankrupt airline.

The stock fell nearly 2% on Friday (May 15), marking the third straight day of decline.


“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.“ said InterGlobe Enterprises.


Earlier on May 12, IndiGo denied reports that said it was in talks to acquire. “We deny the contents of these reports and would like to clarify that the Company has not formulated any indicative proposal, nor does it have any interest in this matter,” said a statement from IndiGo on Tuesday morning. IndiGo’s share price jumped by 2.66% after the announcement.

Virgin Australia had filed for bankruptcy in April 2020 after its debts piled to $6.8 billion to over 12,000 creditors which includes employees. The company had requested the Australian government for financial aid, but its request was turned down, pushing its towards bankruptcy.

The airline industry has been badly hit as the COVID-19 pandemic has grounded domestic and international planes. Due to the mounting losses, IndiGo had announced pay cuts for its employees. The company said that its senior employees would get a pay cut of upto 25% for 2020-21 and also rolled out a leave without pay plan.

As per a Bloomberg report, Virgin Australia’s airline administrator Deloitte expects eight indicative offers, out of which, three will be shortlisted and asked to submit a binding offer.

No other airline has expressed interest in Virgin Australia and InterGlobe Enterprises is expected to compete against asset management companies, private equities and investment firms for the bankrupt airline.

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