English High Court approves £1.2bn Virgin Atlantic rescue deal
- 03 September 2020
- Virgin Atlantic
Virgin Atlantic’s £1.2 billion restructuring plan was sanctioned by the English High Court on Wednesday (September 3).
A spokesperson for the airline said: “In order to complete the private-only, solvent recapitalisation of the airline, our restructuring plan has gone through a court-sanctioned process under Part 26A of the UK Companies Act 2006, to secure approval from certain creditors before implementation.
“Today, Virgin Atlantic attended an English High Court hearing where the restructuring plan was formally sanctioned.
“A US procedural hearing will follow tomorrow (September 3), ensuring the restructuring plan is recognised in the US, paving the way for completion of the £1.2 billion private only, solvent recapitalisation of Virgin Atlantic.
“Achieving this significant milestone puts Virgin Atlantic in a position to rebuild its balance sheet, restore customer confidence and welcome passengers back to the skies, safely, as soon as they are ready to travel.”
The restructuring plan announced back in July 14 and August 25 received an overwhelming amount of support from the airline creditors.
The recapitalisation has secured financial backing worth £1.2 billion which will be spread across the next 18 months. This, in addition to the the self-help measures previously taken, including cost savings of £280 million per year and £880 million rephasing and financing of the aircraft deliveries over the next 5 years.
Over the next 5 years, Virgin Atlantic shareholders will be providing £600 million in support; which includes a £200 million investment from Virgin Group and an additional £400 million of shareholder deferrals and waivers.
US hedge fund Davidson Kempner Capital Management LP is providing £170 million of secured financing.
Creditors have also supported the airline with more than £450 million of deferrals.
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