PE firm behind Bonza, Melbourne Victory calls in insolvency experts

Ayesha de KretserSenior reporter

May 11, 2024 – 10.35am

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The private equity backers of Bonza and the Melbourne Victory A-League team have called in a restructuring firm to provide advice on “operational challenges” at the same time as its co-founders have been forced out.

Miami’s 777 Partners had grown rapidly, buying stakes in European soccer teams and in airlines including Bonza, which called in administrators late last month, and Flair, a budget carrier based in Canada.

It is also at the centre of a growing controversy that has pulled in A-Cap, a major New York-headquartered insurer, which has been accused by 777’s other lenders of exercising undue influence over the firm. One asset manager, Leadenhall Capital, has alleged that 777 was “operating a giant shell game at best, and an outright Ponzi scheme at worst”.

777’s Josh Wander last year. The situation has dramatically worsened for the private equity group. AP

Overnight, 777 appointed B. Riley Financial’s restructuring practice to support its operations. The appointment, confirmed by AFR Weekend on Saturday, was first reported by the Financial Times.

The appointment comes less than two weeks after Bonza, a low-cost carrier that counted 777 as its 89.5 per cent owner and financial backer, entered voluntary administration. On Friday, creditors were told that 777 had injected $78 million into Bonza, which only began flying early last year.

The airline owes creditors, including customers and staff, more than $100 million, Hall Chadwick, the administrators, said.

Bonza director Steve Pasko and his 777 co-founder Joshua Wander have both been asked to leave the private equity firm, sources said. Another said Adam Weiss, a 777-appointed Bonza director, had also left the firm.

The move to appoint restructuring experts to 777 casts doubt over the future of its proposed £200 million ($378 million) takeover of English Premier League team Everton, which had already stalled.

777 owns a 19.9 per cent stake in A-League club Melbourne Victory, purchased in 2022 for $8.7 million. At the time the deal was described to shareholders as “not fair but reasonable”. The deal included an option for 777 to own up to 70 per cent of the club within five years by spending up to $30 million, as well as the right to walk away and be repaid $30 million at a compounding interest rate of 10 per cent a year.

777 Partners is a minority investor in many football teams around the world, including Melbourne Victory. Getty

Last year Melbourne Victory posted a $7.6 million loss, weighed down by match day and football expenses. It is owed $180,000 by Bonza, a sponsor. In March, Turkish Airlines replaced Bonza as the major sponsor.

Despite Bonza’s administrators suggesting the airline could resume flights, a second aircraft has departed after being grounded on April 30. The plane, known as Bruce, left Melbourne on Saturday morning, believed to be bound for Kuala Lumpur after a stop in Port Hedland.

AFR Weekend revealed Bonza’s planes had been deregistered from Bonza as the aircraft operator and handed over to a ferry operator on April 30 after the airline defaulted on lease payments to financiers including Citi.

Ayesha de Kretser is a senior reporter with The Australian Financial Review covering the aviation and tourism sectors. She has previously reported on banking, mining and commodity markets. Connect with Ayesha on Twitter. Email Ayesha at ayesha.dekretser@afr.com.au