Sir Richard Branson’s Virgin Atlantic Airlines sells two of the latest aircraft and raises tens of millions of pounds to help survive the toughest winters in recent commercial aviation history.
Sky News £ 1.2bn bailout During the summer, selling and leasing back a pair of Boeing 787 Dreamliners will result in a “cash boost” of up to £ 70m.
The deal confirmed by the airline in response to an inquiry from Sky News on Tuesday evening is with Griffin Global Asset Management, an aircraft lender operating with the support of acquisition company Bain Capital.
This is the latest example of a deal involving parts of Bain and Sir Richard’s virgin empire.
In the fall, private-equity giants dominated Virgin Australia following a financial restructuring. He is also a shareholder of Sir Richard’s Delayed Ocean Cruise Venture, Virgin Cruse’s.
Insiders said Dreamliner’s sale and leaseback would create additional liquidity for Virgin Atlantic Airlines. This was driven by the performance of the freight business during the pandemic and customer demand during the recent Black Friday sale.
Many airlines, including easyJet, have sought to mitigate the balance sheet crisis by selling aircraft that are virtually grounded for most of the year.
With the discovery of the COVID-19 vaccine, the aviation industry has new hopes that it will return to normal within a few years, but many industry executives will see pre-coronavirus levels of demand again until 2024. I predict that it may not be.
Revenues from the sale and leaseback will also be used to repay some of Virgin Atlantic’s debt as part of the solvent recapitalization, sources said.
Under the deal, US hedge fund Davidson Kempner Capital Management has lent £ 170 million to the company.
In a statement, a spokesperson for Virgin Atlantic said: “Virgin Atlantic will complete a privately funded solvent capital increase for airlines on September 4, and will continue to provide essential connectivity and competition to its UK and international customers.
“We continue to look for financing opportunities to strengthen our balance sheet, as already defined in our recapitalization.
“This funding opportunity will allow us to repay our debt and improve our cash position towards 2021 for two of the 787s.
“Passenger and cargo flights continue throughout November, with increasing demand for next Christmas, Easter and summer travel, following the Black Friday sale.
“We are Virgin Atlantic COVID-19 (new coronavirus infection) (# If there is no character limit, add parentheses when it first appears A healthy balance sheet puts a sustainable and profitable airline in jeopardy. “
Sir Richard’s airline has cut nearly half of its workforce since the start of the pandemic, cutting more than 3,000 jobs in the early stages of the crisis and another 1,150 jobs in September.
Aviation executives lamented the lack of government support for the industry in the form of financial and rapid testing to regain confidence in international air travel.
Virgin Atlantic’s bailout agreement is worth a total of £ 1.2 billion, and Sir Richard’s Virgin Group has injected £ 200 million, deferring and exempting £ 400 million of shareholders.
Other creditors have agreed to postpone £ 450m to pay them, but credit card holders such as Lloyd’s Cardnet and American Express have reduced the amount they normally seek as collateral.
Sir Richard holds a majority ownership of Virgin Atlantic and the remaining shares are owned by Delta.
To increase customer demand, Virgin Atlantic has begun offering free insurance to protect customers from the risk of COVID-19 infection on flights operating until the end of March 2021.
Virgin Atlantic sells Dreamliner to support recovery bids after COVID | Business News
Source link Virgin Atlantic sells Dreamliner to support recovery bids after COVID | Business News