Virgin Atlantic has submitted for Chapter 15 individual bankruptcy safety in New York as the firm seeks acceptance for a $1.5 billion recapitalization plan.
On Tuesday, before the Chapter 15 submitting, the firm won acceptance from a courtroom in the United Kingdom to get in touch with a assembly of creditors on August 25 to vote on the restructuring, which the firm suggests has the guidance of shareholders and current creditors, together with Delta Airlines.
“Following the U.K. listening to held before currently, ancillary proceedings in guidance of the solvent recapitalization ended up also submitted in the [United States] below their Chapter 15 course of action,” a spokesperson for the firm said. “These ancillary U.S. proceedings have been commenced below provisions that allow U.S. courts to realize overseas restructuring processes.”
At the listening to in London, the firm said would properly operate out of cash in September.
Very last thirty day period, Virgin Atlantic introduced the recapitalization plan, which would be deployed about 18 months. Below the plan, current shareholders would contribute $750.6 million. Richard Branson’s Virgin Team would contribute $262 million and hedge fund Davidson Kempner would provide $188 million.
Delta main executive officer Ed Bastian has said that Delta would not present cash to maintain Virgin from individual bankruptcy. Delta owns forty nine{312eb768b2a7ccb699e02fa64aff7eccd2b9f51f6a579147b7ed58dbcded82a2} of the firm.
Virgin suspended passenger flights in April due to the COVID-19 pandemic. It resumed flights in July but was faced with weak need. The firm also laid off three,550 employees, retired its Boeing 747-400 fleet, and closed its base at Gatwick Airport, consolidating functions at Heathrow.
In the meantime, Virgin Australia said it is reducing three,000 work opportunities, getting rid of some planes, and concentrating on shorter flights below a detailed restructuring plan below its new owner, Bain Money. The firm said Australian airports ended up recording passenger quantities significantly less than three{312eb768b2a7ccb699e02fa64aff7eccd2b9f51f6a579147b7ed58dbcded82a2} of last year.
The Global Air Transportation Association has said it does not hope the air vacation industry to recuperate from the world wide health disaster till 2024.
Nicolas Economou/NurPhoto