Virgin Atlantic has completed the sale and leaseback of two Boeing 787 Dreamliner aircraft, which it says will allow it to pay down debt and boost its cash position heading into 2021.
Terms have been finalised with Griffin Global Asset Management and Bain Capital Credit, the new owner of Virgin Australia, Virgin Atlantic confirmed on Friday morning (15 January).
According to Reuters, the deal is worth around $230 million (£170 million), and will allow Virgin to repay cash borrowed to secure a $1.2 billion (£880 million) rescue deal last September.
"This latest financing opportunity allows the airline to pay down debt and improve its cash position as it enters 2021, to further strengthen the airline’s resilience until passenger flying resumes at scale," said the airline.
Virgin added it was hopeful the mass roll-out of effective vaccines combined with new testing regimes would allow the UK government to ease its quarantine policy, and stressed the vaccines were already contributing to heightened demand for travel this year.
Chief financial officer Oliver Byers said: “Since the beginning of the crisis, we have taken decisive action to reduce our costs, preserve cash and protect as many jobs as possible.
"As provided for in the recent privately funded solvent recapitalisation, we have continued to explore additional financing opportunities to strengthen our balance sheet into the new year.
"We are proud to be partnering with Griffin on this financing opportunity regarding two of our Boeing 787-900s.
"Their flexibility and speed has been particularly impressive, and we welcome this show of confidence from our new partners.
"This deal will allow Virgin Atlantic to further bolster our cash position, and we are confident that we will emerge a sustainably profitable airline, with a healthy balance sheet.”
Virgin staved off collapse with the completion of its solvent recapitalisation on 4 September last year, with the deal due to deliver a refinancing package with £880 million over 18 months.
It came in addition to existing efforts to secure the carrier’s future, including £280 million in annual cost savings, additional investment by parent Virgin Group and minority stakeholder Delta, and additional private sector financing and support.