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High Court In London Backs Virgin Atlantic's Rescue Plan

High Court In London Backs Virgin Atlantic's Rescue Plan

Virgin Atlantics 1.2 billionpound ($1.6 billion) restructuring plan was approved Wednesday by the High Court in London, allowing the international airline to continue rebuilding its operations after the devastation caused by the coronavirus pandemic.

LONDON: Virgin Atlantics 1.2 billion-pound ($1.6 billion) restructuring plan was approved Wednesday by the High Court in London, allowing the international airline to continue rebuilding its operations after the devastation caused by the coronavirus pandemic.

The deal, which has already been approved by creditors, must now be confirmed in the U.S. courts.

The airline announced the refinancing package in July to ensure its survival after passenger numbers dropped 98% in the second quarter. It includes 600 million pounds of support from the airlines owners, Virgin Group and Delta Airlines, 450 million pounds of deferred payments to creditors and 170 million pounds of financing from U.S.-based Davidson Kempner Capital Management LP.

Virgin Atlantic, founded in 1984 by Richard Bransons Virgin Group, has already cut 3,550 jobs, shuttered operations at Londons Gatwick Airport and announced plans to retire 11 aircraft as it seeks to weather the slowdown in air travel. The airline says it doesnt expect passenger volume to return to pre-pandemic levels until 2023.

“Achieving this significant milestone puts Virgin Atlantic in a position to rebuild its balance sheet, restore customer confidence and welcome passengers back to the skies, safely, as soon as they are ready to travel, the company said in a statement.

Delta invested $360 million in Virgin Atlantic in December 2012, acquiring a 49% stake in the airline. Virgin Group owns the remaining shares.

Virgin flies from Londons Heathrow Airport and Manchester to destinations in the U.S., China, India, Pakistan, South Africa, Nigeria, Israel and the Caribbean.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

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  • First Published: September 2, 2020, 5:09 PM IST
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