Virgin Atlantic set to raise 160 million pounds in new financing

(Reuters) – British airline Virgin Atlantic, which has been hammered by the COVID-19 pandemic like much of the sector, is set to raise 160 million pounds ($222.75 million) in new financing, a spokeswoman for Richard Branson’s airline said in an emailed statement.

“We continue to bolster our balance sheet in anticipation of the lifting of international travel restrictions during the second quarter of 2021”, the spokeswoman said.

“This latest £160 million financing provides further resilience against a slower revenue recovery in 2021”, she said.

The latest financing follows the airline’s completion in January of the sale and leaseback of two Boeing 787s as part of a plan to strengthen its balance sheet.

The deal with Griffin Global Asset Management to raise just over $230 million from the two planes was meant to enable Virgin Atlantic to repay a loan taken on as part of its rescue deal last year.

In the latest raise, Branson’s Virgin Group is set to provide about 100 million pounds and the remaining 60 million pounds would include deferrals, according to Sky News, which first reported the development.

In November, the company said that its 1.2 billion pound rescue deal secured two months prior meant that the airline can survive even if the travel situation were to worsen.

Virgin cut costs by 335 million pounds last year, CEO Shai Weiss told an airline industry event in November. It had also announced 4,650 job losses during the pandemic, halving its workforce, and shrank its fleet.

($1 = 0.7183 pounds)

Reporting by Kanishka Singh in Bengaluru; Editing by Bernadette Baum

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Article source: https://www.reuters.com/article/ousivMolt/idUSKBN2B607R?il=0