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Branson mulls more cash to save Virgin Atlantic

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Resistance: Richard Branson is hoping for a UK government bailout for his airline

Resistance: Richard Branson is hoping for a UK government bailout for his airline

Resistance: Richard Branson is hoping for a UK government bailout for his airline

Richard Branson could pour more money into teetering Virgin Atlantic Airways than the billionaire originally pledged in a bid to attract investors and gain access to state-backed loans, according to people familiar with the matter.

Mr Branson had said he would channel the bulk of a $250m (€230m) infusion for his Virgin-branded companies into the UK airline. The pledge, linked to a request for £500m (€570m) in UK funding guarantees, faces British government resistance.

The talks and amounts are in flux, the people said. US partner Delta Air Lines has said it won't put in more money and raised the possibility that Virgin Atlantic could go through insolvency proceedings.

Mr Branson is pursuing investors to strengthen the bailout application. The 69-year-old's Virgin Group seeks a combination of structured finance, convertible bonds or preferred debt, according to one person, who asked not to be named discussing a confidential matter.

An injection of pure equity could be part of the mix, though airline ownership rules could limit that option.

About 100 investors have been contacted and half have responded, the person said.

Mr Branson himself "has no intention of selling out" of Virgin Atlantic, said Virgin Group spokesman Nick Fox. He declined to comment on the investor search or what form support might take.

Virgin previously confirmed Houlihan Lokey had been engaged to lead the search.

Mr Branson's flagship business is on the line as airlines worldwide are buffeted by the Covid-19 outbreak.

Like other European carriers, Virgin Atlantic has grounded almost all of the fleet, while slashing costs with staff on unpaid leave. That step and question marks over Mr Branson's tax affairs have fuelled a backlash against a bailout by UK politicians. His Virgin Australia unit has been denied a rescue and faces collapse.

Mr Branson, who founded the airline in 1984 and owns a 51pc stake, would remain a top shareholder, the people said. Delta's 49pc stake probably would go down.

Reuters

Irish Independent