Virgin Atlantic might face cash crunch if creditor’s votes are not in their favor in a meeting scheduled on 25 August.
Court hearing (UK) took place on 4 August in which the UK Carrier secured the order for a planned private only recapitalization it announced on 14 July. All eyes are now on Voting which is to be held on 25 August.
Virgin Atlantic, as a part of the process is also seeking protection under chapter 15 of US Bankruptcy code if voting doesn’t go as expected. Chapter 15 of US Bankruptcy code deals with coordinated legal regime in cross border insolvency cases.
The restructuring plan was announced by the carrier on 14 July in a press release on their official website, through which they explained the detail of the plan which they called a private only recapitalization.
The recapitalization plan will inject £1.2bn in the period of over next 18 months. A restructuring package based on a five- year business plan will help the Uk based carrier to return to profitability from 2022.
The plan is supported by existing shareholders Virgin Group and Delta Airlines, new private investors and existing creditors.
The fate of passenger refunds which are stuck due to the Covid-19 pandemic with Virgin Atlantic depends on the recapitalization.
As per the Virgin Atlantic – they have already secured support from majority stakeholders and are positive on the approval of the plan. Once approved, it will come into effect in September.
Passengers and Travel agents whose refunds are stuck with Virgin will be eagerly waiting for the Voting date. Fate unknown what else can they do apart from hoping for the best.