Virgin Atlantic declined to comment on reports that a new £ 400million round of investment is being discussed as prospects for an initial public offering (IPO) diminish.
According to Sky News, the airline is in negotiations with its shareholders and other financial players to raise additional funds to help it get through the normally slower winter months.
According to city officials, the requested amount is still being finalized, but will include a contribution from Sir Richard Branson, the founder of the company.
By the end of the year, it should be announced.
The CEO of the Virgin Group sold $ 300 million of shares in Virgin Galactic, a New York-listed space company, last week, bringing the total raised from the sale of shares in the space company during the pandemic to over of $ 1 billion.
The “portfolio of global leisure, vacation and travel companies that continue to be affected by the impact of the Covid-19 pandemic, as well as supporting the development and growth of new and existing businesses”, according to a representative of Virgin Group.
Virgin Atlantic has benefited from the recent restart of flights between the UK and the US – its most profitable segment – but is bracing for a tough winter due to volatile oil prices and other inflationary pressures.
The airline lost more than £ 650million last year when the global aviation industry was hit by the Covid-19 crisis, and it is set to lose even more money in 2021.
In August, it was revealed that Sir Richard was planning to go on the London Stock Exchange, banking on increased demand for transatlantic travel.
According to a Sky News report on Saturday, despite positive conversations with institutional investors, the proposal has been on hold indefinitely due to the need to revert to standardized trading patterns.
According to an investment manager who spoke to the company, a dramatic improvement in the airline’s financial performance could pave the way for its recovery, although it is unlikely for at least a year.
Since the outbreak, Virgin Atlantic has sought several rounds of funding, including £ 1.2bn in September last year which included £ 200m from Sir Richard, a loan from Davidson Kempner Capital Management in the United States and contributions from creditors.
He also received hundreds of millions of pounds in cash from the sale of several Boeing 787 Dreamliners and a new loan from Virgin Group, which was paid off in installments.
According to a City source, the current financial injection will involve deferral of payments and other aid from creditors, as well as cash.
The remaining 49% belong to Delta Air Lines, which abandoned a plan at the end of 2019 that would have seen Air France-KLM acquire a 31% stake from Sir Richard.