Richard Branson’s Virgin Atlantic seeking investors to avoid collapse
Airline meeting with private equity firms as talks over government bailout continue
Around “a dozen” investors are reportedly circling Virgin Atlantic as Richard Branson’s embattled airline seeks a £500m rescue from the government.
According to The Times, senior management at Virgin - “part of a sector that has been brought to its knees by the coronavirus” - will make presentations to a range of investors this week, while also continuing talks with the Treasury and UK Transport Secretary Grant Shapps.
The airline has “ruled nothing out” in its fight for survival and is understood to be “keen to negotiate a financial injection from both the private and public sectors”, the newspaper adds.
Sky News’s city editor Mark Kleinman says that the airline has also put administrators on standby to handle a potential administration.
The move “does not mean that insolvency is inevitable, but reflects the legal obligation of Virgin Atlantic’s directors to prepare for such an outcome”, Kleinman explains.
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London-born tycoon Branson owns a 51% stake in the company, with the remainder held by Delta Airlines.
As The Times notes, the proposed government bailout has attracted criticism as Branson has “an estimated personal fortune of £4bn and lives on a tax haven in the British Virgin Islands”.
Last week, Virgin Atlantic revealed plans to cut 3,150 members of its 10,000-strong workforce, and to close its operations at Gatwick Airport.
The carrier had previously asked its staff to take eight weeks of unpaid leave between March and May, as part of cost-cutting measures as the industry reels from the effects of coronavirus travel restrictions.