Virgin Atlantic has filed for bankruptcy protection after concerns that it it close to running our of funds.
The airline is seeking protection from its creditors under Chapter 15 of the US bankruptcy code, which allows a foreign company to shield assets in the country.
In its court filing Virgin Atlantic said it had negotiated a deal with stakeholders ‘for a consensual recapitalisation’ that will get debt off its balance sheet and ‘immediately position it for sustainable long-term growth’.
The US filing is tied to a separate action filed in the UK High Court, where Virgin Atlantic obtained approval on Tuesday to convene four meetings of affected creditors to vote on the plan on 25 August.
A Virgin Atlantic spokesperson said: “In order to progress the private-only solvent recapitalisation of the airline, the Restructuring Plan is going through a court-sanctioned process under Part 26A of the Companies Act 2006, to secure approval from all relevant creditors before implementation. With support already secured from the majority of stakeholders, it’s expected that the Restructuring Plan and recapitalisation will come into effect in September. We remain confident in the plan.”