Billionaire business tycoon and founder of the Virgin Group, Sir Richard Branson, has offer as collateral his luxury island resort to help get a bailout package for the stricken airline Virgin Atlantic from the United Kingdom government.
He was seeking a loan and not a handout form the government, Branson said in an open letter to the employees. The amount is predicted to be about £500m.
He said that his Necker Island home in the Caribbean could be mortgaged against a loan for the ailing airline whose survival was at stake.
The pledge came at time when Virgin Group’s airline in Australia was sent into administration.
Both the airlines of the group have been hit hard by the novel coronavirus pandemic and the consequent van on traveling, and an appeal to governments of both countries was made by Branson.
However, there has been criticism of his appeal to governments as critics pointed out to his huge wealth while he was seeking to get help from taxpayers’ money. It is estimated that the personal wealth of Branson is well over £4bn.
49 per cent stake in Virgin Atlantic is owned by the large United States airline Delta.
“Many airlines around the world need government support and many have already received it,” said Branson in his letter to the employees. He also added that the crisisthat was being faced by the airlines as well as by the staff was “unprecedented.”
He said that even though he had wealth, it did not automatically mean that he had “cash in a bank account ready to withdraw”. Replying to his critics, Branson said that he was a tax exile and therefore did not deserve help. He said that he and his wife “did not leave Britain for tax reasons but for our love of the beautiful British Virgin Islands and in particular Necker Island”.
He would offer Necker as security for any loans that he would be offered, he said. “As with other Virgin assets, our team will raise as much money against the island as possible to save as many jobs as possible around the group,” Sir Richard said.
“We will do everything we can to keep the airline [Virgin Atlantic] 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,” Branson said in the letter to staff.
“This would be in the form of a commercial loan – it wouldn’t be free money and the airline would pay it back (as EasyJet will do for the £600m loan the government recently gave them).” he added.
36 years ago, the journey of Virgin Atlantic started with just one plane, Branson pointed out and then added: “Over those years it has created real competition for British Airways, which must remain fierce for the benefit of our wonderful customers and the public at large.”
Last month, he had offered an inject of £250m into the Virgin Group and most of that amount was earmarked for the airline.
(Adapted from BBC.com)