Key financial stakeholders have reportedly backed a £1.2 billion rescue deal for Virgin Atlantic.

The carrier is expected to be among the first users of a new court-sanctioned process introduced as part of government reforms to enable smoother corporate restructurings during the Covid-19 pandemic, according to Sky News.

An announcement is expected to be made as soon as this afternoon.

Founder Sir Richard Branson’s Virgin Group will inject £200 million in cash, while US hedge fund Davidson Kempner will lend £170 million as part of the refinancing package.

Virgin Group and US partner Delta Air Lines are expected to collectively defer about £400 million of fees, with hundreds of millions of pounds more secured in the form of deferrals and advances from payments companies and aircraft lessors.

The backing of payment processor First Data is understood to have been secured in the last few hours, enabling the deal to go ahead, banking sources were reported as saying.

A further £200 million or more is expected to be generated by cost savings as part of a package said to be worth up to £1.2 biilion over 18 months.

The carrier cutting 3,150 jobs – almost a third of its workforce – shifting London flights from Gatwick to Heathrow and trimming its fleet by retiring older aircraft.