Virgin Atlantic says it is still in talks with UK over bailout
Virgin Atlantic today said it was still in talks with the UK government about a state bailout to deal with the travel shutdown caused by the coronavirus pandemic.
The airline said talks were ongoing after the Sunday Telegraph reported that discussions had been “effectively shelved” and Virgin’s owner Richard Branson was now seeking a buyer for the business.
The report said Virgin Atlantic had set a May deadline to find a buyer, but a spokesperson told Reuters this was incorrect.
“Because of significant costs to our business caused by unprecedented market conditions which the COVID-19 crisis has brought with it, we are exploring all available options to obtain additional external funding,” they said.
The spokesperson said talks with the UK government were “ongoing and constructive”.
Virgin Atlantic is based in the UK and is 51 per cent owned by Branson’s Virgin group and 49 per cent owned by US airline Delta.
The coronavirus pandemic has hit the aviation sector hard, tanking demand for flights, closing borders and grounding many aircraft.
Virgin Australia Holdings, which is part of the Virgin group and Australia’s second biggest airlines, has already entered administration and could be sold off.
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Earlier in the week, Branson said Virgin Atlantic would only survive if it gets a financial lifeline from the UK government.
“This would be in the form of a commercial loan – it wouldn’t be free money and the airline would pay it back,” Branson said in a blog post last Monday.
The Sunday Telegraph quoted sources as saying that Singapore sovereign wealth fund Temasek and Northill Capital were among the investors interested in rescuing the airline. US-based Centerbridge Partners and Cerberus Capital Management were also in discussions, it said.
The report said the companies could inject debt, convertible loans or equity which could leave Branson with no remaining stake in the business.
Options being looked at include putting the company into administration, the report said.