Richard Branson's Virgin Atlantic files for Bankruptcy

Richard Branson’s Virgin Atlantic has filed for bankruptcy in the US as the global aviation industry feels the impact of the coronavirus pandemic.

The UK-based airline is seeking protection under chapter 15 of the US bankruptcy code, which allows a foreign debtor to shield assets in the country.

Richard Branson's Virgin Atlantic files for Bankruptcy
The billionaire said he was prepared to put his private Caribbean hideaway Necker Island up as collateral to save the business. image: Twitter

It is the second Virgin-branded airline to struggle this year. Virgin Australia went into administration in April. Meanwhile, Virgin Australia’s new owner Bain Capital is reportedly set to cut 3,000 jobs.

Virgin Atlantic’s US bankruptcy court filing said it had negotiated a deal with stakeholders “for a consensual recapitalization” that will get debt off its balance sheet and “immediately position it for sustainable long-term growth”.

On Tuesday the airline also filed a proceeding in the high court in London, where Virgin Atlantic obtained approval on Tuesday to convene meetings of affected creditors to vote on the plan on 25 August. A Virgin Atlantic spokeswoman said the restructuring plan was before the UK court “to secure approval from all relevant creditors before implementation”.

Bloomberg reported Virgin Atlantic told the high court it could run out of money in September if a restructuring deal is not approved.

 

 

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