Virgin Atlantic Hires Bank To Seek Emergency Funding | Business

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Virgin Atlantic, of Sir Richard Branson, hired the investment bank Houlihan Lokey to try to find investors ready to inject emergency funds into the transatlantic airline to avoid its administrative collapse.

It is understood that more than 100 potential investors have been contacted.

The British government has rejected Virgin Atlantic’s first attempt to secure a £ 500m loan to keep the airline afloat while all of its planes are immobilized. Virgin Atlantic is 51% owned by the Virgin group in Branson and 49% by Delta Air Lines.

Branson’s attempt to secure taxpayers’ money was met with criticism from the public and politicians, who said that the billionaire should finance the airline himself. It has been pointed out that Branson has paid no personal income tax in 14 years since moving to his private island in the British Virgin Islands free of tax. Branson is the seventh richest person in the UK, with an estimated fortune of £ 4.7 billion.

Branson said earlier, “I have seen a lot of comments on my net worth, but this is calculated on the value of Virgin businesses around the world before this crisis, not cash in a bank account ready to withdraw. “

Branson spokesman said on Sunday: “Virgin Group provides cash to help businesses and save jobs.” Richard and the Virgin group are committed to the airline and are not seeking to sell Virgin Atlantic. They recognize that additional investment will be needed to compensate for the total loss of revenue due to Covid-19 and are working with Houlihan Lokey to approach private investors about the investment opportunity. “

Branson had set a deadline for selling the airline, which he founded in 1984 and has often called “one of my children,” according to reports released on Sunday.

Delta has ruled out pumping new funds into the airline as it faces its own cash crunch.

Virgin Australia called on directors last week after failing to get a bailout of $ 1.4 billion (£ 715 million) from the Australian government. This company is 10% owned by Virgin Group.

Branson has pledged to inject $ 250 million (£ 197 million) into Virgin Group, his empire that spans planes and trains to health clubs and spacecraft, and which employs approximately 70,000 people. The engagement – of which 100 million dollars would be reserved for the airline company – represents 5% of its fortune.

A spokesperson for Virgin Atlantic said: “Due to the significant costs to our business resulting from the unprecedented market conditions brought about by the Covid-19 crisis, we are exploring all options available to obtain additional external funding. Houlihan Lokey has been appointed to assist the process, focusing on financing the private sector. Meanwhile, we continue to take decisive action to reduce costs, preserve cash and protect jobs. “

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The UK airline industry has urged the government to expand the coronavirus retention program as people are expected to delay flights for months.

Tim Alderslade, the managing director of Airlines UK, asked the Treasury to provide certainty about the scheme, according to Sky News.

“We believe that the program should be extended beyond June and that measures should be taken – including a ‘gradual reduction’ of the system or a review on a sectoral basis – to avoid aviation being faced with a cliff after June. while services are being expanded, “he said.

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