Virgin Group commits GBP200m of immediate funding for Virgin Atlantic

Sir Richard Branson’s Virgin Group has committed GBP200m of immediate funding for Virgin Atlantic as the grounded airline races to secure a GBP1b rescue package early this month. The commitment will help bolster the struggling airline’s cash reserves in the coming months in the face of a slow recovery in international air travel that has been decimated by the coronavirus pandemic. While Virgin Group is planning to provide about GBP200m in cash now, according to people close to the process, additional shareholder support of about GBP400m has also been committed. This will come from Delta, which has a 49% stake in the airline, as well as Virgin Group — the majority shareholder with a 51% holding. The GBP400m is likely to be in the form of deferred payments such as brand fees and shared IT and back-office platforms. The deal will be structured to ensure no change in Virgin Atlantic’s current shareholding.  The cash injection comes as Virgin Atlantic is attempting to finalise a multipronged refinancing package of about GBP1b. On top of the GBP600m from existing shareholders, another key part of the airline’s rescue package is expected to come from private investors, who will provide about GBP250m in debt funding. <br/>