Virgin Atlantic still in talks with UK government on COVID-19 bailout, airline says
27 April, 2020
Virgin Atlantic continues to be talking with the British government in regards to a bailout package to handle the devastating ramifications of the coronavirus outbreak on travel together with concentrating on private sector funding, a company spokeswoman told Reuters.
The comments came following the Sunday Telegraph reported that founder Richard Branson was seeking a buyer for the airline and had set a May-end deadline for a sale, and that talks with the government for a £500 million (US$618.35 million) bailout package had been "effectively shelved".
The spokeswoman said it had been incorrect to say that the company has set a deadline to get a buyer.
"Because of significant costs to our business caused by unprecedented market conditions that your COVID-19 crisis has taken with it, we are exploring all available options to obtain additional external funding," she said.
She said talks with the British government were "ongoing and constructive".
Virgin Atlantic is situated in Britain and is 51 % owned by Branson's Virgin group and 49 % owned by US airline Delta.
The pandemic has bring about a massive fall in global flights demand. Australia's second-biggest airline Virgin Australia, that is a part of Virgin Group, has recently succumbed to third-party led restructuring that could bring about a sale.
Earlier in the week, Branson had said that Virgin Atlantic would only survive the outbreak if it gets financial support from the united kingdom government.
"This would be in the form of a commercial loan - it wouldn't be free money and the airline would repay it," Branson said in a blog page post to staff last Monday.
In its report, the Sunday Telegraph quoted sources as saying that Lansdowne Partners, Singapore sovereign wealth fund Temasek and Northill Capital were among the investors considering rescuing the airline. US-based Centerbridge Partners and Cerberus Capital Management were also in discussions, it said.
The interested companies may offer to structure a rescue by injecting debt, equity or convertible loans, that could leave Branson without residual stake in the airline, based on the sources cited in the report.
The deal options likewise incorporate putting the company into administration, it added.
Source: www.channelnewsasia.com
TAG(s):