14th Jul 2020 11:34
(Alliance News) - Virgin Atlantic Airways Ltd has secured a GBP1.2 billion rescue deal to keep the carrier in the skies, Sky News reported on Tuesday.
Richard Branson's airline is expected to issue a statement later on Tuesday, the broadcaster added.
The financing will come in the form of a GBP200 million injection from Branson himself and a GBP170 million loan from hedge fund Davidson Kempner Capital Management LP, Sky News explained.
Virgin Atlantic also secured hundreds of millions of extra cash from other payment deferrals.
The carrier's two largest shareholders, Virgin Group and Delta Air Lines Inc, will defer GBP400 million in fees between them and Virgin Atlantic Chief Executive Shai Weiss has spotted GBP200 million in cost savings.
The GBP1.2 billion package also includes the backing of a subsidiary of financial services technology firm Fiserv Inc.
https://news.sky.com/story/coronavirus-bransons-virgin-atlantic-lands-1-2bn-rescue-deal-12028259
The Covid-19 pandemic has led to a troubling time for airline companies across the world, as lockdown measures batter demand and empty skies.
Virgin Atlantic investee Flybe, which aviation, energy, and civil engineering firm Stobart Group Ltd also had a stake in, collapsed into administration in March due to the virus crisis.
In May, Virgin Atlantic said it will axe over 3,000 jobs and move its operations from London's Gatwick airport to Heathrow, as part of measures to "reshape and resize" the business.
Similarly, International Consolidated Airlines SA-owned British Airways has begun consultation on up to 12,000 redundancies, while Ryanair Holdings PLC has decided to cut 3,000 jobs.
By Eric Cunha; [email protected]
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