Virgin Atlantic says it is continuing to explore all options to obtain additional external funding following reports it has retained restructuring specialists to consider a pre-pack administration.
Sky News reported today the airline had put the firm Alvarez & Marsal on standby to put contingency plans in place for an insolvency process and handle a potential administration.
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The airline would not comment on whether on the news it was preparing for a pre-pack, but in a statement a spokesman said global investment bank Houlihan Lokey was continuing to consider all funding options, with a focus on private sector funding.
Last month the airline was told to resubmit its £500 million bid for government state aid amid reports the Treasury felt the carrier had not “exhausted other options”.
The statement 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.”
According to Sky News, A&M will be focused on looking into options for a pre-pack administration in order to restructure the airline and help it survive after the coronavirus crisis.
A pre-pack deal would wipe out the equity of existing shareholders, including Sir Richard Branson’s Virgin Group, which own 51%, and Delta Air Lines, which owns 49%.
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