Virgin Atlantic (VS, London Heathrow) has started the next round of investor courtship with 12 entities out of the initial 100 prospective bidders emerging as "serious contenders", Bloomberg has reported.
While the list of would-be investors has not been made public, it reportedly includes private equity funds Greybull Capital (former owner of Monarch Airlines (1968)), Apollo Global Management (the owner of Sun Country Airlines), Centerbridge Partners, and Cerberus Capital Management, as well as Singapore's sovereign wealth fund Temasek Holding.
The Financial Times reported that Virgin Atlantic hopes to secure a deal by the end of the current week.
The airline needs around GBP750 million pounds (USD920 million) in fresh capital, although it is not necessarily seeking the full amount from private investors. Despite its initial bid for GBP500 million (USD615 million) state aid being rejected by the UK government, discussions between Virgin Atlantic and Downing Street continue.
As talks with potential public and private partners continue, Richard Branson's Virgin Group said it was planning to sell a significant package of shares in space travel business Virgin Galactic (VGX, Las Cruces) to prop up the group's airlines.
Virgin Group's subsidiary Vieco 10 Limited said it planned to sell 25 million shares in Virgin Galactic (VGX, Las Cruces) to or through Credit Suisse valued at around USD440 million. Vieco 10 Limited is 80.7%-owned by Virgin Group, with the remainder held by Abu Dhabi's Aabar investment fund.
The shares being sold represent around 20% of Branson's holding in Virgin Galactic.
"Virgin intends to use any proceeds to support its portfolio of global leisure, holiday and travel businesses that have been affected by the unprecedented impact of COVID-19," Branson's vehicle said.
Virgin Group owns 51% of Virgin Atlantic with the balance of shares owned by Delta Air Lines (DL, Atlanta Hartsfield Jackson).
Branson has previously pledged Necker Island, his residence in the British Virgin Islands, as security for commercial loans and not as collateral on loans from the UK taxpayer. His resident status in the tax haven has prompted a public outcry against any potential bailout for Virgin Group-owned firms in the United Kingdom.
