Please ensure Javascript is enabled for purposes of website accessibility

Sir Richard Branson Seeks $620 Million Bailout, Offers Island as Collateral

By Rich Smith – Apr 20, 2020 at 12:14PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Does Virgin Atlantic's financial stress raise questions about Virgin Galactic?

Sir Richard Branson is widely believed to be the seventh richest person in Britain, richer than the Queen of England, and the 286th richest person in the world, according to Bloomberg. His personal fortune is estimated to be worth $5.84 billion.  

That may not be rich enough to save Virgin Atlantic, however.

Virgin Atlantic crew wearing PPE standing in front of a Virgin Atlantic airplane.

Image source: Virgin Atlantic.

Branson's famed airline, founded in 1984, is on the ropes as a result of coronavirus. As Britain's The Guardian reports today, Branson has asked the UK government to provide him with a £500 million bailout (about $621 million) "to save his Virgin Atlantic airline from going bust."  

In a blog post published this morning, Branson laments that "this is the most challenging time we have ever faced ... [in] the five decades I have been in business" as Virgin Atlantic reels under "a devastating impact [from] this pandemic."  

As Branson explains in his post, despite his sizable net worth, his cash is "not sitting as cash in a bank account ready to withdraw," but rather tied up in the value of his several companies. Accordingly he is asking the British government to extend Virgin Atlantic a "commercial loan" of about $620 million. Branson is promising to put up his privately owned Necker Island (in the British Virgin Islands) as collateral, along with "other Virgin assets" as security for any loans he might receive.

Sir Richard Branson owns 51% of Virgin Atlantic. U.S. air giant Delta Air Lines (DAL 0.33%) owns the remaining 49%.

His first request for a government bailout was rejected by the British government, prompting this present offer of collateral with a renewed plea "to keep the airline going" and maintain "real competition for British Airways, which must remain fierce for the benefit of our wonderful customers and the public at large."

Rich Smith has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Delta Air Lines. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Delta Air Lines Stock Quote
Delta Air Lines
DAL
$30.62 (0.33%) $0.10

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
339%
 
S&P 500 Returns
109%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 10/06/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.