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Virgin Atlantic gets backing for £1.2bn rescue deal

If announced, it will be one of the first restructuring programmes under a new ruling for companies hit by the crisis

virgin aircraft

Virgin Atlantic has received backing from key financial stakeholders to secure a £1.2bn rescue deal.

The cash-strapped airline will be among the first to go through a new court-sanctioned process to enable quicker corporate restructuring during the coronavirus crisis.

READ: Virgin Atlantic races to secure £1bn private rescue deal with Richard Branson injecting £200mln

The new announcement could be made as soon as Tuesday afternoon, Sky News reported.

The air carrier is set to receive £200mln from Richard Branson’s Virgin Group, while hedge fund Davidson Kempner will lend £170mln.

Another £400mln would come from deferrals of fees agreed with Delta Airlines and Virgin Group, which own 49% and 51% of the firm respectively.

Cost-saving measures would generate a further £200mln.

Virgin Atlantic reportedly agreed on Tuesday morning on a settlement with payments group FirstData, which had been asking to hold onto the cash generated by future bookings as collateral.

Without the deal, the company could face administration, as the UK government has been resisting to rescue airlines with taxpayers’ money.

Virgin Atlantic already announced plans to make a third of its staff redundant and leave Gatwick airport, while 80% of staff have been on furlough.

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