Ann: VAH S&P Rating Update, page-2

S&P still estimating recovery of senior unsecured debt as 10-30%. It doesn't specifically mention VAHHA, just the other wholesale notes, but in the prospectus it's stated that VAHHA is ranked equally to those, so VAHHA holders can probably expect a 70-90% loss.

Seems to me VAH holders can probably assume they will be wiped out, as the company has negative equity and the recapitalisation will require a big equity injection which will dilute current VAH stock out of existence. I expect whichever PE mob wins the bid will take it private. Then probably take advantage of the debt and equity wipeout to get the books looking good, relist it in a few years, make a multiple of profit and Exit Left.

I guess the potential black swan in this is that the government, or a state government, may step in with a sweetener during the administration process once they've ensured the big five foreign shareholders will be wiped out, in which case debt recovery may be slightly more than expected. Reading between the lines of the media coverage of government statements the last couple of weeks, there seems to have been some communication between PE and the government to ensure a market-based solution to the problem, which explains the government's apparent indifference to Virgin's fate despite their insistence that two domestic airlines are non-negotiable.