Delta Air not to invest more money into Virgin Atlantic

Bloomberg

The co-owner of Virgin Atlantic Airways Ltd said it’s unable to invest more in Richard Branson’s struggling UK airline, and raised the possibility it could face going through insolvency proceedings.
Delta Air Lines Inc, which owns a 49% stake in Virgin Atlantic, can’t help out because it’s consumed with its own problems and has already bumped up against UK limits on foreign airline ownership, Ed Bastian, the US company’s chief executive officer, said on Thursday.
“With our crisis in cash, we need to protect our own business. That’s where our focus is,” Bastian said in an interview with CNBC. “I trust Virgin will work through its challenges with the government. If they are required to go through an administration process in the UK, I’m confident they could re-emerge.”
The blunt commentary offers a window into the peril facing Branson, who’s swiftly become the highest-profile victim of an airline-industry crisis that’s only just getting started.
Virgin Australia, another carrier he founded, entered administration this week after failing to obtain a state bailout, and beleaguered Virgin Atlantic has seen resistance to its request for hundreds of millions of UK-backed loans.
Virgin Atlantic has enough cash to get through mid-summer, according to a person familiar with the matter.
In a statement, the carrier said it remained in a “stable position.” It said it’s exploring “all available options to obtain additional external funding,” while acting to “reduce costs, preserve cash and protect jobs.”
Branson’s Virgin Group controls Crawley, England-based Virgin Atlantic, and has said it lacks the resources to get through the coronavirus pandemic. The 69-year-old entrepreneur is struggling to convince governments to rescue his brands given his own highly visible wealth and long-time residency in the West Indies, which has led him to be viewed as a tax exile.
Virgin Atlantic said its discussions with stakeholders are constructive. Branson has offered to invest some $250 million in Virgin Group companies, and said he would offer his Necker Island estate in the Caribbean as collateral for funds. While restructuring is possible under the UK’s administration process, it more often leads to insolvency than Chapter 11 bankruptcy in the US.
Britain has yet to decide on Virgin Atlantic’s weeks-old application for hundreds of millions of pounds in support.
The government has asked the airline to provide details of its efforts to seek private-sector funding and hired Morgan Stanley to assess its profitability,
viability and contribution to
the UK economy, according to people with knowledge of the matter.
Delta acquired the stake in Virgin Atlantic in 2013 to boost its stake in the lucrative market for trans-Atlantic travel.

Finding a buyer for Virgin
Australia an expensive job!
Bloomberg

Restructuring experts expect to be paid just A$200,000 ($127,000) for the monumental task of finding a buyer for Virgin Australia Holdings Ltd, the highest-profile airline to fall to the coronavirus.
The debt-laden carrier said it handed control to administrators at Deloitte after being overwhelmed by a near-halt in passenger revenue. The remuneration excludes a 10% goods and services tax, according to a circular to Virgin Australia’s creditors posted on Deloitte’s website.
The first creditors meeting is on April 30, the circular said.
Administrators aim to find a buyer for Virgin Australia, which had more than A$5 billion in debt at the end of 2019, in two to three months. More than 10 parties have expressed an interest, according to Vaughan Strawbridge, one of the four administrators.