German financial powerhouse Deutsche Bank has emerged as one of 14 potential private investors weighing up a rescue of Virgin Atlantic.
They all participated in a virtual conference earlier this week hosted by investment bank Houlihan Lokey, which has been appointed to seek around £750 million from both private investors and existing shareholders, such as founder Sir Richard Branson, to keep the airline flying.
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A source close to the talks told the i newspaper that Deutsche Bank had joined interested parties that took part in Monday’s conference.
Other potential rescue partners include finance houses Apollo Global Management, Centerbridge, Cerberus and former Monarch owner Greybull Capital.
Leading sovereign wealth funds such a Singapore-based GIC and Temasek, as well as the Norwegian Government Pension Fund Global, have also expressed an interest in investing.
Virgin Atlantic is looking to raise around £750 million before going back to the government with a revised rescue plan in the next two weeks.
Sir Richard earlier revealed his group would look to sell a stake worth around £350 million in his space tourism venture Virgin Galactic to help fund the rescue of Virgin Atlantic and the group’s leisure and holiday interests.
Houlihan Lokey will whittle the 14 potential investors down to a handful and start one-on-one talks.
Investors may wish to take on the debt in the business, which would be secured against Sir Richard’s 51% stake, rather than dilute the billionaire’s grip on the business immediately.
With the funding and a new five-year plan in place, Virgin Atlantic chief executive Shai Weiss will go back to chancellor Rishi Sunak at the end of May to request dispensation to access the government’s Covid Corporate Financing Facility (CCFF), which the airline does not qualify for currently because the group does not have an investment grade rating.
As part of a £500 million loan deal, Weiss will ask Sunak to guarantee credit card payments already made to Virgin Atlantic to help with refund costs and a CCFF loan.
Virgin Atlantic has announced more than 3,000 job cuts in the UK and end operations at Gatwick.
The airline employs about 10,000 people. Many airlines have been struggling as the coronavirus pandemic has brought global travel to a virtual standstill.
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