Virgin Atlantic to secure £160 million through a new funding round

Virgin Atlantic to secure £160 million through a new funding round

by Nandita Bhardwaj

Richard Branson-owned British air carrier, Virgin Atlantic, is reportedly set to secure a sum of £160 million (approx. USD 222.75 million) through a new funding initiative. The financing comes after the completion of the company’s sale and leaseback of two Boeing 787s in January 2021, as part of its plan for strengthening the balance sheet.

Sources aware of the development stated that the agreement with Griffin Global Asset Management for raising just more than USD 230 million from the two planes was intended at enabling Virgin Atlantic to repay a loan that was taken on as part of its rescue deal during COVID-19 lockdown in 2020.

According to a Virgin Atlantic spokeswoman, the company is persistent in bolstering its balance sheet in expectation of the lifting of global travel restrictions during the Q2 of 2021. She added that the latest funding of £160 million provides the company with further resilience against a sluggish recovery of revenue in 2021.

Back in November 2020, the airline had stated that its £1.2 billion rescue agreement secured two months prior indicated that the air carrier can survive even though the travel circumstances were to worsen.

For the record, the fresh investments include the provision of nearly £100 million by Branson’s Virgin Group. The remaining £60 million would comprise deferrals.

As per a November 2020 statement by CEO Shai Weiss, Virgin Atlantic slashed costs by £335 million in 2020. The company announced nearly 4,650 job losses amid the COVID-19 pandemic, reduced its workforce by half, and shrank its fleet.

Voted through by creditors the previous summer, the agreement accounted for an overall £1.2 billion through an 18-month-period, with Virgin Group injecting a sum of £200 million, in addition to £400 million of shareholder waivers and deferrals.

It is to be noted that British Airways, the bitter rival of Virgin Atlantic, secured billions of pounds from an equity-raise, providing further headroom by consenting for the deferral of pension contributions.

Meanwhile, EasyJet has also pressured stakeholders for new capital, raising a loan of £1.4 billion from the UK Export Finance.

Source credits:

https://www.reuters.com/article/us-health-coronavirus-virgin-atlantic/virgin-atlantic-set-to-raise-160-million-pounds-in-new-financing-idUSKBN2B607R

 

Nandita Bhardwaj

Having a marketing management post graduate degree under her belt, Nandita spent considerable time working in the field of recruitment. However, her real interest lay in playing with words and soon enough, she commenced her career in the field of content creation. Currently, she authors insightfu Read more...