Branson 'to mortgage private island' to save Virgin
Richard Branson has said he will mortgage his private Caribbean island to raise money to help his flailing Virgin Group empire, as he asked the British government to step in and save his Virgin airline from collapse.
Mr Branson, who is the UK's seventh richest person with an estimated $7.2 billion fortune, and has lived tax-free on Necker Island in the British Virgin Islands for the last 14 years, promised in a public blogpost on Monday (local time) that he would "raise as much money against the island as possible to save as many jobs as possible".
Mr Branson, 69, tried to convince the British government to give his airline a $1 million loan to help it through the "devastating impact this pandemic continues to have".
"The reality of this unprecedented crisis is that many airlines around the world need government support and many have already received it," Mr Branson wrote.
"We will do everything we can to keep the airline going - but we will need government support to achieve that in the face of the severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for."
Critics have asked why billionaire Mr Branson shouldn't use his own fortune to save the business.
Former British Home Secretary Diane Abbott tweeted: "Branson has not paid tax in this country for 14 years. On no account should he get a taxpayer bailout, loan or otherwise."
Branson partially addressed this criticism in his blogpost, saying, "I've seen lots of comments about my net worth - but that is calculated on the value of Virgin businesses around the world before this crisis, not sitting as cash in a bank account ready to withdraw."
Mr Branson added that "if the UK does help Virgin Atlantic to survive, it will not be free money but repaid on commercial terms."
Airbus, which makes Virgin Atlantic's planes, and Rolls-Royce, which makes its jet engines, have warned that the company's collapse would likely sink their businesses too.
Mr Branson warned of the impact on consumers if his airlines ceased operations both internationally and in Australia, writing: " … the brilliant Virgin Australia team is fighting to survive and need support to get through this catastrophic global crisis. We are hopeful that Virgin Australia can emerge stronger than ever, as a more sustainable, financially viable airline. If Virgin Australia disappears, Qantas would effectively have a monopoly of the Australian skies. We all know what that would lead to."
VIRGIN AUSTRALIA READIES FOR VOLUNTARY ADMINISTRATION
Earlier, it emerged that Virgin Australia is expected to go into voluntary administration, as sources close to the airline said senior figures had been locked down in meetings all Monday but were unable to find a solution to keep the company afloat.
The business has sought financial help from a variety of sources but it is understood the board of directors are preparing to hand the company over to administrators.
Deloitte are set to be appointed as administrators after already being called into to assist Virgin with its restructuring effort.
The Queensland Government had offered $200 million in assistance to the airline to keep it in the state while the New South Wales government had offered support if it moved its base to Western Sydney.
The federal government has refused to bail out the company with a $1.4 billion loan but could become involved during the administration process.
It comes after speculation that a consortium, led by an overseas airline, was also prepared to buy out the business.
Melbourne-based private equity firm BGH Capital is emerging as a strong contender to take over Virgin Australia, with the markets bracing for the embattled airline to go into administration early on Tuesday.
The firm, run by Robin Bishop, Ben Gray and Simon Harle, has been examining the airline's books in recent days and has expressed strong interest.
It's thought the firm is one of several interested in the airline, which analysts believe can be run profitably if it can jettison the more than $5 billion of debt it is servicing.
Any deal struck by administrators for a rebooted airline would almost certainly see Virgin's foreign creditors and shareholders lose billions, with no way forward if the airline is still carrying massive debt.
Analysts believe the airline can succeed without major job losses for Virgin's 10,000 workforce, and that a restructure could be completed within several months, meaning the airline would be grounded mostly during the coronavirus lockdown.
The Morrison Government had not agreed to the $1.4 billion special loan Virgin Australia had been seeking, and with the company's shares suspended from trade, the airline was running out of options.
BGH declined to comment to News Corp.