Virgin Atlantic survival relies on £200m credit card deal

posted on 10th July 2020 by Eddie Saunders
Virgin Atlantic survival relies on £200m credit card deal

Virgin Atlantic is in detailed talks with Cardnet, which is owned by Lloyds Banking Group, and First Data, a subsidiary of American Fiserv according to a Sky News report.

The airline was hoping the two companies could be persuaded to release about £200m of funds to aid its working capital as part of a broader rescue deal that in the past week has grown to over £1bn in various financing commitments.

Banking sources expressed optimism that a deal would be agreed with the merchant acquirers in the next few days, although they cautioned that without their agreement, the entire refinancing of Virgin Atlantic could yet be jeopardised.

Last monththat the company was racing to stitch together a deal, which will include £200m from Sir Richard’s Virgin Group in the form of a capital injection, along with various fee deferrals.

Virgin Atlantic is now aiming to have a deal provisionally signed off by the middle of next week.

Davidson Kempner Capital Management, a hedge fund, has been chosen by Shai Weiss, Virgin Atlantic’s chief executive, as the preferred provider of roughly £150m of new debt funding, while aircraft lessors have also agreed to support a deal.

Approval is also needed from a syndicate of bondholders which lent money to it in 2015 against its take-off and landing slots at Heathrow.