Virgin Atlantic’s creditors have voted in favour of the airline’s recapitalisation in a “significant milestone” for the carrier.
A US court had heard earlier this month that Virgin may run out of cash next month had the restructuring plan and injection of new capital – first announced in July – not been signed off.
A hearing in the English High Court will now take place on September 2 to sanction its Restructuring Plan, with a US Chapter 15 procedural hearing to follow the next day.
The restructuring is based on a five-year business plan which envisages the carrier returning to profitability from 2022.
The refinancing includes cost savings of about £280 million a year and £880 million in re-phasing and financing of aircraft deliveries over the next five years.
A Virgin Atlantic spokesperson said: “In order to complete the private-only, solvent recapitalisation of the airline, our Restructuring Plan is going through a court-sanctioned process under Part 26A of the UK Companies Act 2006.”
“Today, Virgin Atlantic has reached a significant milestone in safeguarding its future, securing the overwhelming support of all four creditor classes, including 99% support from trade creditors who voted in favour of the Plan.
“The next step is an English High Court hearing on September 2 to sanction the Restructuring Plan. We remain confident that the plan represents the best possible outcome for Virgin Atlantic and all its creditors and believe that the court will exercise its power to sanction the Restructuring Plan, at a hearing scheduled on September 2. A US Chapter 15 procedural hearing will follow on September 3, ensuring Virgin Atlantic’s Restructuring Plan is recognised in the US, paving the way for the £1.2bn private only, solvent recapitalisation of Virgin Atlantic.
“Achieving this milestone puts Virgin Atlantic in a position to rebuild its balance sheet, restore customer confidence and welcome passengers back to the skies as soon as they are ready to travel.”