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Virgin suitor Indigo Partners made play for airline 18 months ago

American airline investor Indigo Partners approached three of Virgin Australia’s major shareholders about buying a controlling stake in the airline 18 months ago, in a sign it is a serious bidder for the now-collapsed company.

The Arizona-based fund, which owns stakes in the US carrier Frontier Airlines and European group Wizz Air, is one of at least 11 parties looking to take control of Virgin after it went into voluntary administration last Monday owing almost $7 billion.

Indigo Partners has previously looked at investing in Virgin, according to well-placed sources with knowledge of the events, and came close to buying a controlling equity stake near the end of 2018.

The firm agreed to buy a 20 per cent stake in Virgin from Chinese conglomerate HNA, which was undergoing a fire-sale of its global assets to pay down crushing debts, and approached fellow Chinese investor Nanshan and Abu Dhabi’s Etihad Airways about acquiring some or all of their 20 per cent shareholdings in Virgin too, according to a source who spoke on the condition of anonymity because the discussions were confidential.

However, the deal fell apart because one or both of the other shareholders rejected the offer. Indigo did not want to be left with the same level of control over Virgin as three other major shareholders, a situation it believed was responsible for the company’s strategic paralysis.

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