VIRGIN Atlantic has put administration advisers on standby in case it is unable to secure funding.
Richard Branson’s airline, which has faced financial troubles since the coronavirus outbreak, called in restructuring specialist Alvarez & Marsal (A&M) to compile plans in case it goes bust, Sky News reports.
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Virgin Atlantic has put administration advisers on standby in case it is unable to secure funding[/caption]
The firm would be focusing on creating a pre-pack administration – where a company arranges a deal to sell its assets to a buyer before appointing administrators – for Virgin.
A pre-pack deal would mean its existing shareholders, such as US company Delta Air Lines, would not longer have its shares in the business.
When asked for a comment by The Sun, a spokeswoman for Virgin Atlantic said it was exploring different options to obtain additional external funding but did not confirm if it had brought A&M on board.
She added: “We continue to take decisive action to reduce our costs, preserve cash and protect as many jobs as possible.
“Discussions with a number of stakeholders continue and are constructive, meanwhile the airline remains in a stable position.
“Virgin Atlantic is committed to continuing to provide essential connectivity on competitive terms to consumers and businesses in Britain and beyond, once we emerge from this crisis.”
Sir Richard has appointed investment bank Houlihan Lokey to help find investors after he was previously criticised for seeking a £500m government bailout.
Ryanair boss Michael O’Leary said Branson – worth an estimated £3.8 billion – should “bail himself out” while a petition was set up calling for him to be stripped of his knighthood.
After the criticism, Branson shelved his government bailout bid.
He later posted a letter on Twitter saying he was prepared to put his private Caribbean island, Necker, up for collateral to save Virgin Atlantic.
But people were quick to point out that 49 per cent of Necker island – worth around £80million – is owned by US airline Delta.
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Earlier this week, it was announced more than 3,000 jobs at the Virgin Atlantic and Virgin Holidays travel brands would be axed to help save the business.
It follows similar moves across the travel industry with British Airways cutting 12,000 jobs.
Ryanair also said it was ditching 3,000 roles.
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