Virgin Atlantic lenders ‘hire advisers and are braced for restructuring’ after coronavirus grounding
CITY advisers have been hired by a group of banks invested in Virgin Atlantic Airways, ahead of an expected restructuring of the firm, according to reports.
The group have asked Deloitte to advise them on the impact of being exposed to Richard Branson’s firm.
One source told Sky News it had at least £250million owed to them by the company.
The airline has been facing problems since the start of the coronavirus outbreak.
Earlier this month Virgin put administration advisers, Alvarez & Marsal (A&M), on standby in case it went bust.
It has already confirmed it will make around a third of its staff redundant in an attempt to stay afloat.
At one point it was expected Branson would ask the Government for a bailout due to the impact of the pandemic. Talks regarding this are still ongoing.
Ryanair boss Michael O'Leary said at the time that 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.
A spokesperson for Deloitte said it wasn't commenting on this story.
A Virgin Atlantic spokesperson said: “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.
"Houlihan Lokey has been appointed to assist the process, focusing on private sector funding. Meanwhile, 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.”
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In an attempt to get back on its feet, the 2021 schedule has now been announced for flights.
The travel industry has been hit especially hard by the outbreak and Virgin isn't the only airline struggling.
British Airways has announced it is cutting 12,000 jobs and Ryanair also said it was ditching 3,000 roles.