Virgin Atlantic faces crunch vote to save restructuring plan

Richard Branson’s Virgin Atlantic Airways faces a crunch vote in less than three weeks to determine whether a hard-won GBP1.2b-rescue goes ahead or if the airline is headed for collapse. Meetings of four creditor groups will be held on Aug. 25 after the company began a legal process in the UK to stop any holdouts from blocking the package. Virgin told a London court Tuesday that it will fold next month if the financing plan fails. It filed an ancillary petition for Chapter 15 bankruptcy protection in the US to freeze creditors there and ensure the UK process is recognised. The airline’s proposals, which bring in new money from Branson and US hedge fund Davidson Kempner Capital Management, will require a restructuring of existing debt. Virgin Atlantic says it has already secured backing from three of the four creditor groups: aircraft leasing firms, the providers of $280 million in revolving credit, and so-called related-party creditors including shareholder Delta. That leaves a fourth group to persuade, the airline’s trade suppliers. Virgin Atlantic is one of the first companies to use the new UK court process, which allows a judge to force holdouts to go along with a financial restructuring if enough creditors approve.<br/>