Struggling carrier Virgin Atlantic has taken the next step in its proposed financial structuring, with the English High Court having sanctioned the move.
A Virgin Atlantic spokesperson said: “In order to complete the private-only, solvent recapitalisation of the airline, our restructuring plan has gone through a court-sanctioned process under Part 26A of the UK Companies Act 2006, to secure approval from certain creditors before implementation.
“Today, Virgin Atlantic attended an English High Court hearing where the restructuring plan was formally sanctioned.”
A US procedural hearing will follow later on Thursday, designed to ensure the plan is recognised in the United States.
“Achieving this significant milestone puts Virgin Atlantic in a position to rebuild its balance sheet, restore customer confidence and welcome passengers back to the skies, safely, as soon as they are ready to travel,” said the spokesperson.
The restructuring plan was announced on July 14th.
On August 25th, the airline secured the overwhelming support of all four creditor classes, including 99 per cent support from trade creditors who voted in favour of the process.
The solvent recapitalisation will deliver a refinancing package worth around £1.2 billion over the next 18 months in addition to the self-help measures already taken.
These include cost savings of £280 million per year and £880 million rephasing and financing of aircraft deliveries over the next five years.
Shareholders are providing £600 million in support over the life of the business plan - including a £200 million investment from Virgin Group.
Creditors have also supported the airline with over £450 million of deferrals.