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Virgin Australia has entered into voluntary administration.
The announcement came after a board meeting of its international shareholders voted against providing more financial support, and Virgin went into a trading halt on the stock exchange last week.
“Virgin Australia has entered voluntary administration to recapitalise the business and help ensure it emerges in a stronger financial position on the other side of the COVID-19 crisis,” the airline said in a statement to the ASX.
Australia’s second largest carrier asked for $1.4 billion financial lifeline, during this COVID10 crisis, but the Government rejected the calls and the finance minister said “The government is not in the business of owning an airline,”.
Virgin is 90 per cent foreign-owned, with Singapore Airlines, Etihad Airways and Chinese conglomerates HNA Group and Hanshan owning 80 per cent between them, and Richard Branson’s Virgin Group holding 10 per cent.
Australian Government expected the shareholders to pump in more money to save the Airline and “They have some very big shareholders with deep pockets,” Treasurer Josh Frydenberg noted on Monday.
Virgin began in Australia in 2000 as Virgin Blue and became a major player in the domestic market after the collapse of Ansett Australia the following year.