Virgin Australia Holdings bondholders have withdrawn plans for a proposed recapitalisation of the airline that was meant to rival one from US private equity firm Bain Capital, a spokesman for the bondholders said on Friday.

Singapore’s Broad Peak and Hong Kong’s Tor Investment Management, which had proposed the rival deed of company arrangement (DOCA) to recapitalise the airline, hold around A$300 million ($216 million) of Virgin’s A$2 billion of unsecured bonds, part of nearly A$7 billion owed to creditors.

A court ruling this week makes it impossible to complete due diligence and present a substantially unconditional DOCA proposal to rival Bain’s at a creditors’ meeting on Sept. 4, the spokesman for the bondholders said.

Virgin Australia is in voluntary administration, the closest Australian equivalent to Chapter 11 bankruptcy provisions used to restructure companies in the United States.

Administrator Deloitte plans to issue a report to creditors on Aug. 25 outlining the return they should expect under the Bain deal, which has not yet been made public.

“After the release of the administrator’s report, we reserve our rights to take whatever action is necessary to protect our interests as creditors,” the bondholders’ spokesman said.

The bondholders have said their DOCA would allow for the conversion of noteholders’ and certain other unsecured creditors’ debts into equity worth around 69 cents on the dollar, with an option for creditors to sell their shares for cash.

The administrator welcomes the bondholders’ withdrawal as it will allow it to focus on the binding agreement with Bain ahead of the creditors’ meeting, a Deloitte spokesman said.

Meanwhile, Transport Canada plans to conduct flight test activities for the validation of Boeing Co’s grounded 737 MAX next week, the regulator told Reuters on Thursday, as part of global efforts to return the plane to service following two fatal crashes involving the model.

Reuters