Virgin Atlantic reaches ‘significant milestone’ in securing future
A vote by creditors was a key part of a court-sanctioned process being used by the airline to implement the deal.
Virgin Atlantic says it has reached “a significant milestone in safeguarding its future” after creditors voted to approve a £1.2 billion bailout.
The vote was a key part of a court-sanctioned process being used by the airline to implement the deal.
It warned earlier this month it could run out of money by the end of September if the rescue package is rejected.
The company said in a statement: “Today, Virgin Atlantic has reached a significant milestone in safeguarding its future, securing the overwhelming support of all four creditor classes, including 99% support from trade creditors who voted in favour of the plan.
“The next step is an English High Court hearing on September 2 to sanction the restructuring plan.”
Virgin Atlantic has been hit hard by the collapse in demand caused by the coronavirus pandemic.
The £1.2 billion rescue deal involves only private funds, and includes a cash injection of £200 million from founder Sir Richard Branson’s Virgin Group.
Creditors are being asked to accept 20% less than they are owed, and for repayments to be rescheduled.
The airline insists that without a “solvent recapitalisation” its directors would have “no choice” but to place it into administration, which would “result in a poor outcome for the company’s creditors”.
Virgin Atlantic has said it does not expect demand for air travel to return to pre-pandemic levels until 2023.
In May it announced it would shrink its operations, including closing its Gatwick base and cutting 3,550 jobs.
