Virgin Atlantic owner, Sir Richard Branson, has said they could possibly run out of money in September 2020 if creditors do not go ahead with the 1.2bn rescue deal.
Virgin’s lawyers have said that the airline is essentially good right now but a reestablishment of fresh money is critical to securing Virgin’s future as the plans need approval from creditors but only under a court-sanctioned process.
To keep themselves safe during this process Virgin Atlantic is seeking protection under chapter 15 of the US bankruptcy code, this enables a foreign debtor to shields Virgins assets in the country.
This is all happening due to the financial state of the business which was affected, like many other airlines, by the drop in air travel due to the Covid-19 pandemic.
Whilst attending court in London Virgin was told that the airline’s cash income would drop to serious critical levels bu the middle of September and then Virgin would completely run out of money altogether by the week beginning of the 28th of September.
Mr. David Allison said that without a firm recapitalization which would need to include a new amount of money income, the Virgin Atlantic’s directors would have no other choice but to place the company into immediate administration, in order to wind down any business and sell as many assets, where is possible.
If this were to happen to Virgin then it would make 3,000 jobs made redundant and this would close the operation at Gatwick Airport.
