Keeping Virgin Atlantic creditors back $1.6 bln rescue plan

LONDON, Aug twenty five (Reuters) – Virgin Atlantic’s change creditors voted on Tuesday in favour of a 1.2 billion pound ($1.6 billion) rescue plan, moving the air carrier a step closer to doing a restructuring developed to secure its future beyond the coronavirus issues.

Virgin Atlantic agreed the deal with shareholders and monetary and other major creditors in July, additionally, on Tuesday smaller companies that the carrier owed money to also approved it.

“Today, Virgin Atlantic has gotten to a major milestone in safeguarding the long term of its, securing the overwhelming support of all the 4 creditor classes, including ninety nine % help from change creditors that voted in favour of the plan,” a sp

“Achieving this milestone sets up Virgin Atlantic in a place to rebuild its balance sheet, restore customer confidence and welcome passengers back to the skies once they are prepared to travel.”

The air carrier, 51 % owned and operated by Richard Branson’s Virgin Group and forty nine % by U.S. airline Delta DAL.N, has had to shut its platform at London’s Gatwick Airport and cut more than 3,500 jobs to contend with fallout from COVID-19.

The pandemic has grounded planes and hammered need for air travel.

Virgin Atlantic had reported in a court filing in August it would run out of money by the conclusion of September unless the recapitalisation strategy was authorized.

A hearing at London’s High Court is due for Sept 2 to approve the plan.

“We continue to be confident that the plan belongs to the best possible outcome for Virgin Atlantic and all the creditors of its and think that the court will exercise its power to sanction the restructuring plan,” the spokeswoman said.

A procedural hearing is slated for Sept 3 in the United States so that the deal could be recognised there.

(Reporting by Alistair Smout; Editing by Kirsten Donovan and John Stonestreet)

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