A U.S. bankruptcy judge yesterday granted recognition of Virgin Atlantic’s rescue plan under chapter 15 of the U.S. Bankruptcy Code, Reuters reported. The airline’s 1.2 billion pound ($1.59 billion) rescue deal is set for completion this week after a London judge gave the go-ahead to the company’s restructuring plan in a court hearing on Wednesday. The deal aims to secure Virgin Atlantic’s survival through the coronavirus crisis. The airline had projected it would run out of cash at the end of September unless the plan was approved. Read more.
In related news, Virgin Australia Holdings Ltd’s creditors voted today in favor of the purchase of Australia’s second-biggest airline by U.S. private equity group Bain Capital, administrator Deloitte said, paving the way for a strategic overhaul, Reuters reported. The deal will allow the carrier to emerge from voluntary administration, which it had entered in April owing A$7 billion ($5 billion) to creditors after suffering from a sharp plunge in demand due to the coronavirus pandemic. The Bain deal gives unsecured creditors a return of 9 percent to 13 percent of their investment and involves a financial commitment of A$3.5 billion, according to administrator Deloitte, which said Virgin shares should be transferred to the private equity group by Oct. 31. Read more.
