Troubled airline Virgin Atlantic finalises rescue deal worth £1.2bn
It also includes deferring hundreds of millions of pounds owed both to Virgin Group and to fellow shareholder Delta Air Lines.
The company said the plan paved the way for the airline to rebuild its balance sheet and return to profitability in 2022.Like other airlines, it was forced to ground most of its fleet for months and is not due to resume services until next week. Both Virgin Group and its fellow shareholder Delta Air Lines will defer payment of money owed to them by the airline worth £400m. Other creditors are expected to defer payments worth £450m.
Virgin Atlantic calls this a"solvent recapitalisation". But the question is, will it be enough to secure the company's long-term future? But it doesn't seem to give the company much of a war chest to absorb future shocks. It is due to resume flights next week - and managers will be desperate for demand to pick up, and quickly.
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