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Virgin Australia's home state weighs bailout for bankrupt airline

Queensland will look 'carefully' into rescue, state treasurer says

Virgin Australia is responsible for 5,000 jobs in the home state of Queensland.   © Reuters

SYDNEY -- Virgin Australia Holding's home state is considering a capital infusion or a loan to assist the financially distressed airline as it seeks to protect a major employer responsible for thousands of jobs.

Cameron Dick, treasurer for the Australian state of Queensland, said Wednesday that he directed the Queensland Investment Corp. to make a proposal toward supporting the nation's second-largest airline.

"We'll look very carefully at how we invest, if we invest at all," said Dick.

The state's aim is to protect as many of the 5,000 workers hired by Virgin Australia in Queensland. "Governments must act to secure jobs, to support jobs, to create jobs," Dick said.

Queensland Investment will look at various options and advise the state government on the best way to move forward, including acquiring a stake, extending a loan or making a buyout proposal with partners, according to the treasurer. 

Virgin Australia has been devastated by the fallout from the coronavirus pandemic that has leveled the airline industry worldwide. The company announced on April 21 that it entered into voluntary administration seeking bankruptcy protection after failing to secure a government bailout. The airline owes creditors nearly 7 billion Australian dollars ($4.5 billion).

Deloitte, the airline's administrator, is accepting turnaround bids through the Friday deadline.

Nineteen companies and investment funds have shown interest, according to a source familiar with the matter.

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