As the global airline industry battles the fall-out of Covid-19, Virgin Atlantic has come up with a restructuring plan that - once approved and implemented – will keep the airline flying.
According to a statement released yesterday, its restructuring plan is based on a five-year business plan. With the support of shareholders Virgin Group and Delta, new private investors and existing creditors, it expects to rebuild its balance sheet and return to profitability from 2022.
The recapitalisation will deliver a refinancing package worth c.£1.2bn over the next 18 months in addition to the self-help measures already taken, including cost savings of c.£280m per year and c.£880m rephasing and financing of aircraft deliveries over the next five years.
- Shareholders are providing c.£600m in support over the life of the plan, including a £200m investment from Virgin Group, and the deferral of c.£400m of shareholder deferrals and waivers
- New partner Davidson Kempner Capital Management LP, a global institutional investment management firm, has come on board and is providing £170m of secured financing
- Creditors will support the airline with over £450m of deferrals
- The airline continues to have the support of credit card acquirers (Merchant Service Providers) Lloyd’s Cardnet and First Data.
