Virgin Group founder Richard Branson will inject GBP200 million pounds (USD249 million) into Virgin Atlantic (VS, London Heathrow), to help it survive the ongoing impact of the coronavirus on air travel.
The money, funded with the proceeds of selling USD500 million worth of shares in space tourism venture Virgin Galactic, are part of a Virgin Atlantic rescue package of up to GBP900 million (USD1.12 billion).
GBP400 million (USD498 million) of this has already been agreed between the transatlantic carrier and its two major shareholders, Virgin Group and Delta Air Lines (DL, Atlanta Hartsfield Jackson), the Guardian newspaper reported.
This partly consists of the two investors waiving or deferring fees, such as the GBP20 million (USD25 million) Virgin Atlantic pays each year to use the Virgin branding and payments due to Delta for using its IT and ticketing systems.
Meanwhile, Virgin Atlantic continues to work on securing additional funding from outside investors, such as the hedge funds Elliott and Davidson Kempner Capital and the private equity group Centerbridge Partners, which would bring in a further £250 million (USD311 million). These talks are expected to conclude next week.
Another GBP200 million has reportedly been agreed as relief from some of the carrier's suppliers, such as deferred payments to Airbus. The British government, however, has so far ruled out a bailout. Virgin Group's appeal for public funds has prompted a great deal of criticism of Branson, who has paid no personal income tax in the UK since moving to the tax-free British Virgin Islands in 2006.
