Virgin still bidding for Ansett


Richard Branson's Australian carrier Virgin Blue has resubmitted a bid for Ansett Airlines with partner Lang Corp

By CNN's Geoff Hiscock
Asia business editor

SYDNEY, Australia (CNN) -- Richard Branson's expansion ambitions in Australia may be back on track after his Virgin Blue discount airline was invited to resubmit a bid for the failed carrier Ansett Airlines.

Virgin Blue's partner in the potential Ansett takeover, Lang Corporation, told the Australian Stock Exchange Friday the two companies had agreed to a request from Ansett's administrators to renew their offer.

But a spokesman for the administrators said late Friday there was no "request" and the Lang move was "too little too late".

He confirmed there was no change in the initial reaction of the administrators, Mark Mentha and Mark Korda of accounting firm Andersens, who said last month they still planned to sell the airline's main assets to Tesna, a syndicate led by Melbourne businessmen Lindsay Fox and Solomon Lew.

Ansett, wholly owned by Air New Zealand, fell into financial difficulties three months ago with debts of about $1 billion.

Air New Zealand, beset by its own financial woes, cut Ansett loose, putting it in voluntary administration on September 14. The administrators have been operating a slimmed-down version of the airline while they seek to negotiate the sale of its assets.

Lang takeover depends on bid


A syndicate led by Melbourne tycoons Solomon Lew (L) and Lindsay Fox remains the frontrunner for Ansett

Lang Corp, a transport and logistics group headed by former merchant banker Chris Corrigan, agreed on November 24 to inject up to $156 million (Aust. $300 million) into Virgin Blue and take a controlling interest in it, if it was successful in a bid for Ansett.

Virgin Blue, which started Australian services in September last year as a one-class discount carrier, is now the No. 2 player in the market. Qantas, with an 85 percent share, dominates the domestic scene.

When the administrators rebuffed the Lang/Virgin approach in late November, they left the door slightly open, saying the sale to Fox/Lew was conditional.

"If those conditions are not met, then we may be in a position to deal with Lang Corporation," they said.

In its statement to the ASX Friday, Lang said its offer was on the same terms as made previously, and included the purchase of Ansett terminals, maintenance division and spare parts.

Would employ up to 2000

"The offer also includes an undertaking to employ up to 2000 former Ansett employees and to assume the accrued entitlements of those employees," it said.

The Fox/Lew bid, accepted by the administrators on November 8, still looks favored to win Ansett. Their Tesna syndicate announced this week it planned to begin operations from January 31, operating 750 flights a week on eight mainline routes.

The $1.8 billion Fox/Lew proposal for Ansett's "mainline assets" would take up to 4000 employees and involves re-equipping the airline with new Airbus A320 aircraft.

Lang said it had repeated its request to the Ansett administrators for access to the Ansett data room. It said access could lead to it making an offer for further Ansett assets, which would increase the return to creditors.

It wants the administrators not to make any amendments or concessions to Tesna until Ansett creditors have looked at the Lang/Virgin offer.

A Lang Corp spokeswoman said late Friday the company was still awaiting a response from the administrators.

A spokesman for the administrators told CNN late Friday that potential bidders had access to the Ansett data room from October 1 to November 8, when the Tesna bid was accepted. After that time there was no chance a competitor such as Virgin Blue would be given access to commercially sensitive data.

A statement from administrator Mark Mentha said: "If Mr Corrigan, Lang or Virgin had made an offer that preserved the Ansett business and maximised returns to creditors, the administrators would have dealt with them at the time".