Virgin Atlantic Hires Adviser for Potential Administration: Sky
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Virgin Atlantic Airways Ltd. hired Alvarez & Marsal to advise on a potential administration as it struggles to secure a U.K. government bailout, Sky News reported.
Coronavirus: Virgin Atlantic puts A&M on standby in race for funds
The restructuring specialist was hired earlier this week to work on options for a pre-pack administration, which may cut the equity of Richard Branson’s holding company and Delta Air Lines Inc., according to the report, which cited unidentified people familiar with the matter. The carrier is still in talks with the government and private investors to secure new capital, with adviserHoulihan Lokey reaching out to investment funds includingApollo Global Management, Centerbridge andCerberus Capital Management, Sky News says.
“Because of significant costs to our business caused by unprecedented market conditions which the Covid-19 crisis has brought with it, we are exploring all available options to obtain additional external funding,” the company said in a statement.
Virgin confirmed that Houlihan Lokey had been hired to assist in finding private funding. “Discussions with a number of stakeholders continue and are constructive, meanwhile the airline remains in a stable position,” the company said.
Earlier this week, the company said itplans to eliminate 3,150 jobs, or about a third of the workforce, and shutter its London Gatwick hub to ride out the coronavirus crisis. Prime Minister Boris Johnson’s government has so far ruled out a broad bailout of the aviation industry, asking companies to first tap all commercial avenues to raise funds to protect taxpayer interests.
The U.K. is set to announce that it will require travelers to self isolate for 14 days upon arriving at the country’s ports or airports, the Times reported on Saturday, adding further strain on the industry. A call between airlines and ministers is scheduled to take place on Sunday to discuss the plans, Sky says.
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