Virgin Atlantic saved from collapse as £1.2billion rescue package is approved


Virgin Atlantic says it has reached “a significant milestone in safeguarding its future” after creditors voted in favour for a £1.2billion bailout.

The move will protect the airline from bankruptcy and form part of a restructuring deal that will save the business £600million over 18months.

The vote was a key part of a court-sanctioned process being used by the airline to implement the deal.

It warned earlier this month it could run out of money by the end of September if the rescue package is rejected.

In a statement, the carrier said that its creditors had voted in favour of the proposal on Tuesday afternoon.

The airline added: “Today, Virgin Atlantic has reached a significant milestone in safeguarding its future, securing the overwhelming support of all four creditor classes, including 99% support from trade creditors who voted in favour of the plan.

“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.


“The next step is an English High Court hearing on 2 September to sanction the Restructuring Plan.

“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, at a hearing scheduled on 2 September.

“A US Chapter 15 procedural hearing will follow on 3 September, ensuring Virgin Atlantic’s Restructuring Plan is recognised in the US, paving the way for the £1.2bn private only, solvent recapitalisation of Virgin Atlantic.”

Get the latest money advice, news and help straight to your inbox – sign up at mirror.co.uk/email

Today’s announcement comes three months after the airline announced 3,150 jobs losses, representing almost a third of its 10,000 UK workforce.

In May, the airline said jobs were on the line, as thousands of staff remained furloughed and top executives were forced to take a pay cut.

At the time, the airline said it would cease operations from Gatwick airport, to instead focus on Heathrow and Manchester Airports in an effort to save money.

Virgin Atlantic also said it plans to cut the size of its fleet from 45 aircraft to 36 by the summer of 2022.

The company is anticipating that customer demand will be at least 40% lower during 2020, with flights unlikely to bounce back to normal levels until 2021.





Source link