Virgin Atlantic’s £1.2 billon restructuring programme has been given the green light by the UK’s High Court, with the deal set to complete by the end of the week.
“In order to complete the private-only recapitalisation of the airline, our restructuring plan has gone through a court-sanctioned process under Part 26A of the UK Companies Act 2006, to secure approval from certain creditors before implementation,” a Virgin Atlantic spokesperson said.
“Today, Virgin Atlantic attended an English High Court hearing where the Restructuring Plan was formally sanctioned. A US procedural hearing will follow tomorrow, September 3, ensuring the restructuring plan is recognised in the US, paving the way for completion of the £1.2 billion private only recapitalisation of Virgin Atlantic.
“Achieving this significant milestone puts Virgin Atlantic in a position to rebuild its balance sheet, restore customer confidence and welcome passengers back to the skies, safely, as soon as they are ready to travel” the spokesperson added.
The restructuring plan was announced on July 14. On August 25 the airline secured the overwhelming support of all four creditor classes, including 99% support from trade creditors who voted in favour.
Virgin Atlantic’s recapitalisation is based on a five-year business plan, and with the support of shareholders Virgin Group and Delta, new private investors and existing creditors, it paves the way for the airline to successfully rebuild its balance sheet and return to profitability.
One new investor into the airline is Davidson Kempner Capital Management, a global institutional investment management firm which is providing £170million of secured financing.