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Richard Branson’s Virgin empire is out for cash

May 15, 2020, 2:16 PM UTC

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Pressed on all sides by the coronavirus pandemic, the travel-focused Virgin Group diaspora is scrambling to raise cash.

Virgin Atlantic, the U.K.-based airliner majority-owned by Richard Branson’s Virgin Group, is reportedly in talks to raise some $916 million from Deutsche Bank and others as the virus razes travel. 

It follows on the heels of other Virgin Group subsidiaries in the fiefdom in damage control mode: Virgin Australia Holdings has received bids from potential buyers including Brookfield, Bain Capital, and BGH Capital after filing for bankruptcy protection last month, per reports. Subsidiary Vieco 10 meanwhile said earlier this week that it may sell up to 25 million (worth about $400 million) of its shares in space travel company Virgin Galactic to support its leisure and holiday businesses. Branson himself has gone as far as to put his private island up as collateral.

Branson has cultivated something of a daredevil image with his high-flying stunts and broken world records, his ownership of a private Carribean island only adding to the package of an eccentric and glitzy billionaire. Now that same persona is a reason for hesitation among governments being asked for aid from the Virgin companies.

Notably, Virgin Atlantic is still negotiating with the British government for rescue funding, while Australia refused to provide financial aid to Virgin Australia over concerns that it amounted to a bailout of its foreign owners.

Private equity under a spotlight: U.S. department store chain J.C. Penney is expected to file for bankruptcy protection as early as today, following on the likes of other large clothing retailers J. Crew and Neiman Marcus struggling to pivot to e-commerce as shoppers stay off the streets during the pandemic coronavirus. J.C. Penney is reportedly in talks to secure $450 million from existing lenders for the potential filing.

The spate of retail bankruptcies could also put more public and political pressure on the private equity firms that back them, as this New York Times piece points out. Certainly the coronavirus has been unkind to most of retail, but concerns that some private equity firms placed too much debt on these companies, badly preparing them for a downturn, persist.

Lucinda Shen
Twitter: @shenlucinda


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