Virgin Atlantic creditors to vote on £1.2bn restructuring deal

Virgin Atlantic flight VS355 arrives at London Heathrow, carrying the first UK nationals from India's capital city, Mumbai, back to the UK. The Foreign Office has chartered 12 more flights to bring more than 3,000 stranded UK nationals back from India (PA Wire) (Picture: (PA Wire))

Virgin Atlantic creditors will on Tuesday vote on a £1.2 billion rescue plan for the airline that has been hammered by the coronavirus crisis.

The carrier, which is 51% owned by Richard Branson’s Virgin Group and 49% by US airline Delta, has announced more than 3000 job cuts since the virus outbreak.

Airlines and airports have seen customer demand plunge due to lockdowns, travel restrictions, quarantine concerns and worries about Covid-19.

In July Virgin Atlantic moved to secure its future with a recapitalisation plan. Virgin Group will inject £200 million, with other funds provided by investors and creditors.

The company said at the time that the plan will help paves the way for the airline to rebuild its balance sheet and return to profitability from 2022.

Trade creditors, around 200 suppliers, will today vote on whether to accept the deal which includes changes to the timings of when they are paid.

A deal can still go ahead even if creditors reject it if the judge rules it is the better outcome.