Comment 38 for bug 1531455

Hi, I found a similar problem with a Debian Jessie VM with kernel 3.16.0-4-686-pae, so the situation may not be completely applicable to Ubuntu 16.04, but I think it may help.

I found that unloading just the virtio_net module before rebooting made the kernel panic not happen (no need to change NIC driver to Intel).

So as a temporary workaround, if your VM network interface is eth0, you may make its entry in /etc/newtwork/interfaces look like this:

    iface eth0 inet dhcp
        pre-up modprobe virtio_net
        post-down modprobe -r virtio_net

This worked for me and can be done completely inside of the VM.

I hope that this issue gets fixed since it may be a showstopper for remotely managed VMs. Thanks!