Virgin Atlantic Secures £1.2 Billion Rescue Deal15/07/2020
Sir Richard Branson’s Virgin Atlantic finally secures £1.2 billion worth of rescue deal amid Coronavirus pandemic.
Since, Virgin Atlantic secures a deal. Now it will survive for another 18 months of turmoil while aiming to return into profit from 2022. As, there are no flight services since four months of the pandemic.
The privately funded recapitalisation package will be a combination of cash injections, loans, and deferrals, was confirmed on Tuesday (July 14, 2020).
Davidson Kempner hedge fund will provide about £170m in loans. It has no stakes in Richard Branson’s airline.
However, 51% of the stakes will still remain in the hands of Branson and 49% owned by the US carrier Delta.
On the other hands, shareholders will be providing £600m in support worth of support this including a £200m investment from Virgin Group (Richard Branson), and the deferral of £400m of shareholder deferrals and waivers.
Meanwhile, creditors and suppliers will defer about £450m. Credit card companies will ensure funds from bookings are not withheld from the airline.
Shai Weiss, CEO, Virgin Atlantic commented: “Few could have predicted the scale of the Covid-19 crisis we have witnessed and undoubtedly, the last six months have been the toughest we have faced in our 36-year history. We have taken painful measures, but we have accomplished what many thought impossible. The solvent recapitalisation of Virgin Atlantic will ensure that we can continue to provide vital connectivity and competition to consumers and businesses in Britain and beyond. We greatly appreciate the support of our shareholders, creditors and new private investors and together, we will ensure that Virgin Atlantic can emerge a sustainably profitable airline, with a healthy balance sheet.
“Once our plan is approved, we will continue to focus on providing our customers with the service they have come to expect. Despite the incredible efforts of our teams, through cancelled flights and delayed refunds we have not lived up to the high standards we set ourselves, but we will do everything in our power to earn back their trust.
“While we must not underestimate the challenges ahead and the need to continuously respond to this crisis, I know that now, more than ever before, our people are what sets us apart. I have been humbled by their support and unwavering solidarity throughout. The pursuit of our vision continues and that is down to each one of them.”
The airline furthermore announces, “from 20 July Virgin Atlantic will restart passenger flying and has a vital role to play in supporting the UK economy as it recovers from the impact of the pandemic.”
There are more information available from here.
Previously, Virgin Atlantic announced it will resume flight services from July 2020.