Virgin Atlantic seals new rescue deal, narrowly escapes collapse
Richard Branson’s Virgin Atlantic, which has balanced on the verge of collapse since the inception of the new Coronavirus pandemic, is set to be rescued by a new yet-to-be-announced £1.2 billion deal.
An agreement is about to be signed with three financial services ventures: Fiserv subsidiary First Data, American Express, and Lloyds Bank’s Cardnet. It ensures that passenger payments will be released to the wavering airline, as well as pave the way for financial injections from its owners Virgin Group and Delta Airlines, (DAL) and a loan of up to £200 million from the Wall Street hedge fund Davidson Kempner Capital Management. The total rescue plan should amount to more than £1.2 billion
A substantial restructuring is also set to take place, with hopes that the company will return to profit by 2022. It will include leaving London Gatwick airport and laying off over 3000 staff deemed redundant due to the pandemic.
For the last several months Virgin Atlantic was caught in the struggle for survival. Back in April Richard Branson appealed to both Delta and the UK government for a bailout, stating that should the group collapse, it will take hundreds of thousands of jobs with it, as well as deal a blow to many other companies it works with. Although the bail was rejected, Virgin (VAH) Atlantic restarted resuming its operations in July, albeit on substantially smaller scale than ever before.
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