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UPDATE 2-Virgin Australia enters trade stoppage for assistance, restructuring talks amid a coronavirus crisis | Instant News


* Has requested a $ 1.4 billion loan from the Australian government

* Stocks are tightly controlled by foreign airlines

* The airline has landed almost all flights (Add details about options, Singapore Airlines position)

By Jamie Freed

SYDNEY, April 14 (Reuters) – Virgin Australia Holdings Ltd, which is short of money, entered a trade stop on Tuesday, citing ongoing discussions involving financial aid and restructuring alternatives to help it overcome the coronavirus virus crisis.

The airline, which has requested a loan of A $ 1.4 billion ($ 895 million) from the Australian government, said trade was suspended on its shares and unsecured bills will remain in effect until the announcement by the company or two trading days, whichever is earlier .

Virgin is still in talks with the government about various aid options and has hired investment bank Houlihan Lokey to advise on the possibility of debt restructuring, said someone familiar with the matter who was not authorized to talk to the media.

Virgin and Houlihan Lokey did not immediately respond to requests for comment. The Australian newspaper first reported the involvement of Houlihan Lokey.

Virgin shares are tightly controlled by a group of foreign airlines including Singapore Airlines Ltd., Etihad Airways and Chinese conglomerate HNA Group which also experienced a sharp decline in revenue due to the coronavirus pandemic.

Fitch Ratings last month downgraded its long-term rating on Virgin to B- on the ratings, watching negatively from B +, which included removing a rate increase that had previously been received based on hopes of receiving financial support from its shareholders, especially Singapore Airlines.

The Singapore airline is focusing on its own financial health rather than rescuing Virgin, which can maintain a commercial partnership even if its equity shares are diluted, someone familiar with the matter told Reuters on condition of anonymity.

In a statement, Singapore Airlines declined to comment directly on whether it would provide assistance to its partners, but said a strong aviation sector in Australia and globally would be key to supporting trade, tourism and investment recovery and Virgin would be the center to ensure that was possible.

Etihad and the HNA declined to comment whether they were willing to give funding to Virgin.

Virgin stopped all domestic flights last week, except for one Sydney-Melbourne daily service until June 15.

The airline has cut all international flights except the government rescue charters, terminated most of its workforce and permanently cut all pilots at low cost Tigerair Australia and all crews based in New Zealand.

Virgin competes in the Australian domestic market against bigger rival Qantas Airways Ltd, which has a stronger balance sheet. ($ 1 = 1.5640 Australian dollars) (Reporting by Jamie Freed; Editing by Himani Sarkar and Stephen Coates)

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