UK airline hires adviser for administration

Bloomberg

Virgin Atlantic Airways Ltd hired Alvarez & Marsal to advise on a potential administration
as it struggles to secure a UK
government bailout, Sky News reported.
The restructuring specialist was hired earlier to work on options for a pre-pack administration, which may cut the equity of Richard Branson’s holding company and Delta Air Lines Inc, according to the report, which cited unidentified people familiar with the matter. The carrier is still in talks with the government and private investors to secure new capital, with adviser Houlihan Lokey reaching out to investment funds including Apollo Global Management, Centerbridge and Cerberus Capital Management, Sky News says.
“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,” the company said.
Virgin confirmed that Houlihan Lokey had been hired to assist in finding private funding. “Discussions with a number of stakeholders continue and are constructive, meanwhile the airline remains in a stable position,” the company said.
The company said it plans to eliminate 3,150 jobs, or about a third of the workforce, and shutter its London Gatwick hub to ride out the coronavirus crisis. Prime Minister Boris Johnson’s government has so far ruled out a broad bailout of the aviation industry, asking companies to first tap all commercial avenues to raise funds to protect taxpayer interests.