Virgin Atlantic Airways secured backing from a UK court for a GBP1.2b rescue package Wednesday that will keep billionaire Richard Branson’s airline afloat amid the coronavirus pandemic’s ravaging of the travel industry. The ruling by Judge Richard Snowden clears the path for a bailout that will see US hedge fund Davidson Kempner Capital Management provide funds to the carrier alongside Branson, its founder. Snowden said he was “satisfied” with the plan. None of the creditors opposed the approval at the hearing. Virgin Atlantic saw demand cut to a quarter of 2019 levels in the first half of the year and was denied aid by the UK government after the virus grounded flights. The carrier cut more than 3,000 staff and the remaining 6,500 jobs were at risk as CEO Shai Weiss warned that the airline will run out of cash within weeks without a rescue. An American procedural court hearing is scheduled to take place as part of the firm’s Chapter 15 bankruptcy protection that’s aligned with the British proceedings. “Achieving this significant milestone puts Virgin Atlantic in a position to rebuild its balance sheet, restore customer confidence and welcome passengers back to the skies, safely, as soon as they are ready to travel,” the company said.<br/>
unaligned
Richard Branson’s Virgin empire has faced many challenges in its five-decade history. The setbacks have been so numerous that overcoming them has become part of the Virgin DNA. Yet the six-month battle to save Virgin Atlantic Airways Ltd. has been a case apart, involving as it has the business that first truly took the group global and remains its best-known brand. The battle to stop the carrier from becoming one of the highest-profile corporate victims of the coronavirus crisis was finally sealed on Wednesday after a UK court gave the go-ahead for a GBP1.2b rescue built around a loan from private-equity firm Davidson Kempner Capital Management. The hard-won financing package emerged as the last, desperate option for saving the carrier after it became one of the few worldwide to be refused state support when Britain denied it access to the GBP330b Covid Corporate Financing Facility, a fund tapped by half a dozen airlines. The deal comes at a cost to Branson, who injected GBP200m of his own money into the company, raised through the sale of shares in Virgin Galactic Holdings. “Branson has shown that he has a real attachment to Virgin Atlantic,” said Stephen Furlong, an airline analyst at Davy Stockbrokers in Dublin. “It’s also central to the strength of the Virgin brand and its ability to generate royalties.” Virgin Atlantic’s challenge now will be to ride out the crisis with minimal cash burn as long-haul routes remain limited by border restrictions, while preserving flying rights at London Heathrow airport.<br/>
El Al has received an offer from an investor to inject $51m into the struggling airline in return for 190m shares. It has been formally put to the board by entrepreneur David Sapir, who is active in the tourism business and believes there are opportunities for El Al to benefit from the synergies. The offer covers 190 million shares at $0.268 per share. El Al’s issued capital comprises 495.7m shares which indicates that Sapir is seeking the same sized stake as Knafaim Holdings, El Al’s primary shareholder, which has 38.3% of the airline. According to a 1 September communication from Sapir’s legal representative, the offer is conditioned upon a joint control agreement with Knafaim. The communication points out that Sapir holds Israeli citizenship and has been involved in infrastructure, tourism and other businesses for over 30 years in Central and Eastern Europe as well as Latin America. It says Sapir has drawn up a business plan, which he believes will yield a return to the airline not only in its existing activities but in others where the company is not present.<br/>