UK-based airline Virgin Atlantic which is owned by British business magnate and global investor Richard Branson has received a $1.5 billion rescue deal backed by shareholders and creditors.
The private-only deal spread across 18 months enables the airline to avoid any kind of government aid that had previously been considered by its founder and is expected to be completed towards the end of this summer.
Richard Branson is a British business magnate and an investor who founded the Virgin Group in the 1970s, which now controls more than 400 companies in various fields.
The airline, which is 51% owned by Branson’s Virgin Group and 49% by U.S. airline Delta, has had to close its Gatwick base and cut more than 3,500 jobs to counter the economic fallout from the pandemic.
“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,” Chief Executive Shai Weiss said in a statement while being optimistic about carrier’s profitability from 2022.
“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.”
The airline’s high-profile billionaire founder Richard Branson had drawn widespread criticism after calling for government help for Virgin Atlantic to survive the downturn. The government had said that airlines should use all it’s private avenues of investment before individual support for companies was considered.
Virgin Group will invest 200 million pounds, with shareholders providing 400 million pounds of further support through deferrals and waivers.
A newly introduced partner, Davidson Kempner, an investment firm, will also provide 170 million pounds in secured funding, while creditors are supporting the airline through more than 450 million pounds of deferrals.
