Discussions with payment processing providers could hold the key to Virgin Atlantic finalising a £1 billion rescue package.
The carrier is reported to be involved in talks with Lloyds Banking Group-owned Cardnet and US card processor First Data over £200 million in funding.
Virgin Atlantic is hoping the pair can be persuaded to aid its working capital as part of a broader deal that has grown to more than £1 billion in various financing commitments, according to Sky News.
Other strands of the negotiations are now said to have been broadly agreed with Cardnet and First Data understood to be “the final piece of the jigsaw” in securing an overall deal that could be agreed in the middle of next week.
Banking sources reportedly expressed optimism that an agreement with the merchant acquirers could be sealed in the next few days.
The entire refinancing of Virgin Atlantic could yet be jeopardised without their agreement, it was claimed.
The overall arrangement is believed to include £200 million from founder Sir Richard Branson’s Virgin Group, support from 49% shareholder Delta Air Lines, and US hedge fund Davidson Kempner Capital Management.
Approval is also required from a syndicate of bondholders which lent money in 2015 against the airline’s take-off and landing slots at Heathrow.
A restructuring of operations is being conducted by Virgin Atlantic in an effort to save hundreds of millions of pounds a year due t the Covid-19 crisis, including cutting 3,150 jobs, switching London flights from Gatwick to Heathrow and retiring older aircraft.
The carrier has not updated its rescue plans, but in the past has said: “Virgin Atlantic has been working on a comprehensive, solvent recapitalisation of the airline to ensure that we can continue to provide essential connectivity and competition to consumers and businesses in Britain and beyond.”
Virgin Atlantic declined to comment on talks with the two merchant acquirers.