Virgin Atlantic restructure cleared by high court

The restructure is based on a five-year business plan, with the airline currently engaged in a legal process to secure the support of Virgin Group, which holds a 51% stake in Virgin Atlantic, and Delta, which holds the remaining 49%, as well as existing creditors and new private investors.

Last month, the airline secured the support of all four classes of creditor concerned in the process.

Should Virgin’s plans for a "solvent recapitalisation" progress, the deal would deliver a refinancing package worth around £1.2 billion over the next 18 months.

It comes in addition to cost savings of £280 million a year, while a further £880 million will be saved over the next five years through rephasing and financing aircraft deliveries.

Shareholders will provide an additional £600 million in support over the life of the business plan, which includes £200 million investment from Virgin Group and £400 million shareholder deferrals and waivers.

Davidson Kempner Capital Management LP will provide £170 million secured financing. Creditors have also supported the airline with more than £450 million in deferrals.

Virgin’s credit card acquirers and merchant service providers Lloyd’s Cardnet, First Data and American Express have also all given the process their backing.