Coronavirus: Branson Postpones Virgin Brand Payments | Economic news

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Sir Richard Branson has to postpone tens of millions of pounds sterling in fees owed by the hardest-hit Virgin brand companies, as the coronavirus pandemic is decimating revenue from leisure and travel activities.

Sky News has learned that Virgin Enterprises Limited (VEL), the UK-based company that manages the global Virgin market brand licensing activities, is in talks to give certain companies created by the billionaire a payment holiday for the duration of 2020.

The impending decision means that companies such as Virgin Active, Virgin Atlantic Airways, Virgin Australia, Virgin Cruises and Virgin Holidays will not be required to remit the fees they pay to VEL for using the Virgin brand before the year. next at the earliest.

A source said the potential deal reflected the particular pressure on the travel and leisure businesses in which Sir Richard’s Virgin Group Holdings has interests.



A Virgin Airways plane at Heathrow Airport on October 11, 2016 in London, England.

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The decision to consolidate the cash flows of Virgin brand companies comes as Virgin Atlantic seeks several hundred million pounds of taxpayer support in the form of credit facilities and guarantees against money withheld by credit card companies. credit.

Sky News said on Wednesday that industrial giants – all of which generate revenue from the transatlantic carrier – including Airbus and Rolls-Royce Holdings were pressuring the government to provide financial assistance to the company.

Sir Richard revealed last month that he is injecting $ 250 million into Virgin brand businesses that have been hit by the pandemic, calling it “the biggest crisis the world has known in my lifetime.”

“There are more than 70,000 people in 35 countries working in virgin businesses, all of which have been deeply affected by the pandemic in different ways,” he wrote.

“Since many of our businesses are in sectors such as travel, recreation and wellness, they are fighting massively to survive and save jobs.”

The tycoon added that the $ 250 million investment was “probably just the start.”

“The chances of securing a widespread economic recovery will depend crucially on the success of governments around the world in mobilizing various recently announced support programs, which in these unique circumstances will be essential to protect people’s livelihoods,” he said. -he writes.

Virgin Atlantic is the single largest casualty in the pandemic in Sir Richard’s portfolio, with the vast majority of its fleet immobilized and thousands of employees invited to take leave without pay.

Virgin Active Gym
Picture:
Virgin Active gyms had to close during the epidemic

Rival British Airways plans to lay off tens of thousands of employees, while easyJet has also stopped flying.

Peter Norris, president of Virgin Group, recently urged Boris Johnson to implement an industry-wide rescue package worth up to £ 7.5 billion.

This request seems to have been rejected by Rishi Sunak, the chancellor, who indicated that only “tailor-made” aid would be available “as a last resort”.

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Sir Richard’s flagship airline is by no means the only Virgin brand company to be beaten by COVID-19, however, with Virgin Active clubs closed, and the launch of its cruise operation – which had been planned for this spring – delayed by several months.

The companies in Sir Richard’s portfolio who are unlikely to be affected by the crisis are Virgin Media, the pay TV broadcaster and the mobile network operator.

The group’s paper value, however, was reduced by the 70% drop in the value of Virgin Money in the past 12 months, as banks suffered from extremely low interest rates.

Virgin Group generally holds minority stakes in companies that use the brand, although Virgin Atlantic is an exception, with the billionaire continuing to control his equity.

A Virgin Group spokesperson declined to comment.

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