April 23, 2024

Virgin creditors support rescue deal

By Bev Fearis, published 26/08/20

Virgin Atlantic has won backing from its creditors for a rescue deal to safeguard its future for at least the next 18 months and save around 6,500 jobs.

In the High Court on Tuesday, its creditors – shareholders, banks, aircraft owners and suppliers – voted unanimously in favour of a £1.2bn restructuring plan to save the airline, which previously warned it would otherwise run out of cash before the end of September.

In a statement, Virgin Atlantic said the vote was a ‘significant milestone’ in safeguarding its future.

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

It must now wait for another High Court hearing on September 2 to sanction the deal, followed by a Chapter 15 procedural hearing on September 3 to gain recognition for the plan in the U.S.

“We remain confident that the plan represents the best possible outcome for Virgin Atlantic and all its creditors and believe that the court will exercise its power to sanction the restructuring plan,” it added.

Delta, which owns 49% of Virgin Atlantic, said it remains “firmly supportive” of the company.

Like other airlines, Virgin Atlantic has been hit hard by the impact of the pandemic on air travel.