Richard Branson 'in race to find buyer' for Virgin Atlantic after offering his £80m private paradise Necker Island as collateral in plea for £500m government bailout
- Richard Branson wants to sell Virgin Atlantic before June, according to reports
- It is said that the tycoon has failed in his bid to secure a government bailout
- Around 50 possible investors have inquired about the company, reports say
Sir Richard Branson is looking to sell Virgin Atlantic before the end of May after he failed to secure a government bailout with his £80 million private island as collateral.
The billionaire's pursuit of a £500million taxpayer intervention has effectively been shelved and the airline is concentrating on getting new backing from private investors.
Around 50 possible backers are said to have inquired about the company - with suitors presented with options to inject debt, equity or convertible loans, which could potentially leave face of the brand Sir Richard with no residual stake.
'All options' were said to remain on the table after the investment bank hired by Virgin Atlantic, Houlihan Lokey, reportedly sounded out more than 100 possible financial institutions.
Potential investors are said to include Singapore sovereign wealth fund Temasek and Wall Street investor Cerberus Capital Management.
Sir Richard Branson is looking to sell Virgin Atlantic before the end of May, reports indicate
Lansdowne Partners - a hedge fund founded by George Osborne's best man Peter Davies - was reported to have been interested, but a spokesperson denied the organisation was involved in a refinancing of Virgin Atlantic, and said it had 'no interest in doing so'.
Several parties could form consortia while they review the airline's financial information.
Sources have claimed to the Sunday Telegraph Houlihan Lokey is looking to finish the rescue operation before the start of June.
One possible deal option could see Virgin Atlantic being put into administration, it is understood - with sources claiming accountancy firm EY is thought to be first in line to take any possible appointment.
It is thought Sir Richard, one of the world's wealthiest men, will keep bankrolling the business as the search for investment continues - and while the possibility of a government bailout has been put on hold, it could come back as an option if the current plan fails.
Sir Richard, estimated to have a £4 billion fortune, could not save the Australian arm of his airline from going into administration earlier this week.
Branson, 69, had asked the British Government for a £500 million loan —and offered to mortgage Necker Island, his private Caribbean retreat believed to be worth £80 million
Virgin Australia, the country's second biggest aviation company, went into voluntary administration after failing to secure a £710 million bailout from authorities.
Sir Richard, 69, has asked the British Government for a £500 million loan —and offered to mortgage Necker Island, his private Caribbean retreat believed to be worth £80 million.
He has pledged to 'raise as much money against the island as possible to save as many jobs as possible' in an attempt to persuade the authorities to help Virgin through 'the devastating impact this pandemic continues to have'.
Despite Branson's protestations that Necker Island's zero per cent personal income tax rate had nothing to do with his decision to move there, his status as a billionaire tax exile is said to be one reason why ministers are wary of bailing out the airline.
They know how toxic it would seem to hand over taxpayers' cash to — as one Whitehall official put it to the Mail — 'tycoons with neatly trimmed beards who live on their own private island'.
Virgin Australia, the country's second biggest aviation company, went into voluntary administration after failing to secure a £710 million bailout from authorities
Branson has stated in a memo to staff that 'our companies all pay tax in the countries they operate in'.
A Virgin Atlantic spokesman said: 'Because of significant costs to our business caused by unprecedented market conditions which the Covid-19 crisis has brought with it, we are exploring all available options to obtain additional external funding.
'Houlihan Lokey has been appointed to assist the process, focusing on private sector funding.
'Meanwhile, we continue to take decisive action to reduce our costs, preserve cash and protect jobs.
'Discussions with a number of stakeholders continue and are constructive, meanwhile the airline remains in a stable position.
'Virgin Atlantic is committed to continuing to provide essential connectivity on competitive terms to consumers and businesses in Britain and beyond, once we emerge from this crisis.'
It comes after the Indian owner of Tata Steel, based in Port Talbot, has approached the UK Government for a £500million loan.
Loan: Tata Steel's large customers, such as car makers, have stopped production
The company has reportedly asked for a commercial loan that would be repayable when demand for steel from its sites in Wales recovers.
Its request is being considered by the Treasury and the Department for Business, Energy and Industrial Strategy, Sky News reported. Talks are at an early stage and no agreement is likely to be announced soon.
The move comes after several of Tata Steel's large customers, such as car makers, stopped production.
A spokesman said: 'We continue to work with both the UK and Welsh governments to identify what support is available.'
The manufacturer has also been hit by a rise in raw material costs. China's decision to reopen following the pandemic contributed to high iron prices despite a slump in global demand.
Roughly 1,500 of Tata Steel's 8,000 UK workers have been furloughed.
Separately, British Steel, which is owned by China's Jingye, is set to resume production at its plant in Skinningrove on Teesside with 300 furloughed workers returning tomorrow.
https://news.google.com/__i/rss/rd/articles/CBMiYGh0dHBzOi8vd3d3LmRhaWx5bWFpbC5jby51ay9uZXdzL2FydGljbGUtODI1ODI3OS9SaWNoYXJkLUJyYW5zb24tcmFjZS1idXllci1WaXJnaW4tQXRsYW50aWMuaHRtbNIBZGh0dHBzOi8vd3d3LmRhaWx5bWFpbC5jby51ay9uZXdzL2FydGljbGUtODI1ODI3OS9hbXAvUmljaGFyZC1CcmFuc29uLXJhY2UtYnV5ZXItVmlyZ2luLUF0bGFudGljLmh0bWw?oc=5
2020-04-26 14:45:17Z
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