Branson coughs up for £1.2bn Virgin Atlantic rescue
Sir Richard Branson has invested £200m in the rescue package
Virgin Atlantic has raised £1.2 billion from shareholders and creditors that will secure its future beyond the coronavirus crisis.
It is understood that Sir Richard Branson’s Virgin Group has stumped £200 million.
New partner Davidson Kempner, an investment firm, will provide £170m in secured funding, while creditors are supporting the airline through more than £450m of deferrals.
The agreement removes the need for government support. Sir Richard had been heavily criticised for asking the taxpayer to contribute towards rescuing airlines or any business run by billionaires.
The government had said that airlines needed to exhaust private avenues of investment before individual support for companies was considered.
Virgin Atlantic is 51% owned by Virgin Group and 49% by US airline Delta. It has been forced to close its Gatwick base and cut more than 3,500 jobs to contend with the fallout from the COVID-19 pandemic.
Chief executive Shai Weiss said in a statement: “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.”
He said that despite the grounding of planes and lost income the carrier was now sustainable and is targeting 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.”