Virgin Atlantic is talking to Deutsche Bank, among other institutions, about raising some GBP750m to help it weather the drop in demand brought on by the coronavirus pandemic, according to a person familiar with the matter. The German bank is among a group of around a dozen institutions, mainly private-equity firms, that Virgin Atlantic is talking to this week and next, this person said. Deutsche Bank declined to comment. Virgin Atlantic is looking for around GBP750m, though this figure could include any loans that the British government offers. Virgin Atlantic has been negotiating with the British government over rescue funding. The UK Treasury declined to comment on Virgin Atlantic. It has become harder for Virgin Atlantic to gauge exactly how much money it will need after the UK government said over the weekend it is looking at imposing a 14-day quarantine on anybody seeking to enter Britain. Airlines say this will stop many people from traveling to the UK, making their ability to recover from the pandemic even more difficult. Virgin Atlantic has told those it is speaking to that it wants one, or a few, key lenders or investors that can provide all the funds, rather than several institutions, according to the people familiar with the matter. The airline is talking to these groups about a variety of different types of financing, including equity investments, convertible bonds and other types of debt, one of these people said.<br/>
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El Al has warned that the survival of the airline is uncertain as it seeks to secure urgent funding to cope with the coronavirus crisis. In its belated full-year financial statement, El Al says a loan is “essential” and that the are “significant doubts” about the continued existence of the company as a going concern. El Al’s auditor has similarly drawn attention to the uncertainty over the airline’s financial position. Deloitte states that the collapse of demand and disruption caused by the coronavirus outbreak has prompted El Al to adjust its cash outflow and negotiate with lenders over a loan of around $400m. “Negotiations with the state and lender are continuing and uncertainty exists regarding completion,” it adds in a ‘going concern’ note. The airline points out that among the problems it is facing is a decline in aircraft values, which are normally used to secure loans for the company’s activity. El Al is pushing back the release of its Q1 results, aiming to publish them by 30 June.<br/>
Michael O’Leary, Ryanair Holdings’s combative CEO, is picking a fight with Deutsche Lufthansa AG as he ramps up a legal battle with rivals being doled out state aid to survive the Covid-19 pandemic. After challenging a handful of government measures that have favored national carriers while excluding the scrappy Irish discounter, O’Leary said his next target is Lufthansa as Germany and other states ready billions of euros to help the region’s biggest airline overcome the worst slump in more than a century of commercial aviation. “Lufthansa is going around hoovering up state aid like the drunken uncle at the end of a wedding, drinking from all the empty glasses. They can’t help themselves,” O’Leary said. “We don’t want state aid, but we’re now being asked to compete with not one hand, but two hands tied behind our back.” As well as vowing to challenge the expected EC approval for the Lufthansa aid package, he said Ryanair would also seek to topple France’s $8b rescue package for Air France.<br/>
The Queensland government could partner with multiple separate bidders for Virgin Australia, and is understood to be considering offering $200m to join any serious consortia that would guarantee the beleaguered airline remains headquartered in Brisbane. It is understood that one of the leading possible bidders, Canadian investment giant Brookfield Asset Management, has yet to settle on potential consortium partners and is open to joining with Queensland. Virgin Australia’s lead administrator, Vaughan Strawbridge, is expecting the field of potential owners to narrow dramatically, from around 19 interested parties to about eight, when preliminary bids are lodged on Friday. The Queensland treasurer, Cameron Dick, has tasked the Queensland Investment Corporation to assess a potential investment by the state. Queensland is not looking to buy the airline outright but could take a small, “strategic” stake in a future ownership structure, likely to be close to the $200m amount that the government previously offered as a bailout prior to Virgin being placed in administration. NSW has also left open the prospect of investing in a reborn Virgin, which could provide an anchor tenant for a new Sydney airport to be built at Badgery’s Creek, but has not committed itself to bidding. Story has full details.<br/>