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Virgin Atlantic Airways is drawing up plans for a fresh £400m funding injection as prospects fade for an initial public offering (IPO) of Sir Richard Branson’s flagship company.

Sky News has learnt that the transatlantic carrier is in talks with its shareholders and other financial stakeholders about raising additional capital to see it through the traditionally quieter winter months.

City sources said the amount being sought by Virgin Atlantic’s management was still being finalised, but would inevitably involve Sir Richard contributing another chunk of his fortune to the pandemic-battered airline.

It is expected to be announced by the end of the year.

This week, the Virgin Group tycoon sold $300m of stock in New York-listed Virgin Galactic – bringing the total he has raised from selling shares in the space tourism business during the pandemic to more than $1bn.

Virgin Atlantic has been helped by the recent resumption of flights between the UK and US – the most profitable part of its business – but is braced for a difficult winter amid oil price volatility and other inflationary pressures.

Synchronised flights leave Heathrow
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The double take-off from Heathrow

Earlier this month, it staged a joint take-off from Heathrow with British Airways, a rare sign of collaboration between the bitter rivals, to mark the restart of flights to New York’s John F Kennedy airport.

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Virgin Atlantic lost more than £650m last year as the COVID-19 crisis decimated the global aviation industry, and it expects to have made a further substantial loss in 2021.

Sky News revealed in August that Sir Richard was plotting a surprise listing on the London Stock Exchange as it pinned its hopes on a glut of demand for transatlantic travel.

However, despite positive talks with institutional investors, the need to return to normalised trading patterns has prompted them to shelve the plan indefinitely.

A significant improvement in the airline’s financial performance could yet pave the way for it to be revived, although that is unlikely for at least a year, according to one fund manager who held discussions with the company.

An IPO would have marked the first time since Virgin Atlantic’s launch in 1984 that it has sold shares to the public – and would almost certainly see Sir Richard relinquish overall control of the business.

Virgin Atlantic has sought several rounds of funding since the start of the pandemic, the most notable of which was a £1.2bn solvent rescue package in September last year which included £200m from Sir Richard, a loan from the American hedge fund Davidson Kempner Capital Management, and substantial contributions from creditors.

It has also landed hundreds of millions of pounds more – in multiple instalments – from the sale of several Dreamliner aircraft and a further loan from Virgin Group.

The latest financial injection includes payment deferrals and other creditor assistance as well as cash, according to a City source.

Virgin Atlantic, which is majority-owned by Sir Richard’s Virgin Group, was forced to place administrators on standby last year as the pandemic-induced crisis deepened.

Delta Air Lines owns the remaining 49%, with the company having scrapped a deal in late 2019 that would have seen Air France-KLM acquiring a 31% shareholding from Sir Richard.

Virgin Atlantic has nearly halved its workforce since the start of the pandemic – a move that has helped to drive significant longer-term cost savings.

A Virgin Atlantic Boeing 747-400, with Tail Number G-VROC, lands at San Francisco International Airport, San Francisco
A Virgin Atlantic Boeing 747-400, with Tail Number G-VROC, lands at San Francisco International Airport, San Francisco, California, April 16, 2015. REUTERS/Louis Nastro
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The company has been cushioned by Virgin Galactic’s stock price

The airline is not the only part of Sir Richard’s business empire which has felt the pressure of the pandemic.

The UK arm of Virgin Active also came close to collapse after putting a restructuring deal to landlords, lenders and shareholders.

His Virgin Voyages cruise operation finally embarked on its maiden journey during the summer after more than a year of setbacks.

Nevertheless, the billionaire tycoon has been cushioned by Virgin Galactic’s stock price.

A Virgin Group spokesperson said this week that the latest sale would allow him to support his “portfolio of global leisure, holiday and travel businesses that continue to be affected by the impact of the COVID-19 pandemic, in addition to supporting the development and growth of new and existing businesses”.

In July, Sir Richard flew aboard a Virgin Galactic trip to the edge of space, days before his even-wealthier rival, the Amazon founder Jeff Bezos, did the same on a Blue Origin vehicle.

Sir Richard is now taking Virgin Orbit – the commercial satellite launch group – public through a merger with a US-listed special purpose acquisition company (SPAC).

A Virgin Atlantic spokesman said the airline did not comment on speculation.

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Eco-tycoon Vince weighs sale of solar energy project

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Eco-tycoon Vince weighs sale of solar energy project

The energy group founded by Dale Vince, the eco-tycoon, is kicking off a hunt for investors in a solar park which is expected to become one of Britain’s biggest renewable energy projects.

Sky News understands that Ecotricity, Mr Vince’s company, has hired KPMG to explore talks with prospective investors or buyers for the project at Heckington Fen in Lincolnshire.

The development was approved by Ed Miliband, the energy secretary, earlier this year, and when completed it is expected to generate roughly 600MW of solar power.

It has been designated a Nationally Significant Infrastructure Project by the government.

Heckington Fen will also provide 400MW of battery storage capacity.

According to documents circulated to potential bidders, Ecotricity is prioritising the sale of 100% of the project, but is open to retaining a minority stake.

The company wants to complete a deal during the third quarter of the year.

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Responding to an enquiry from Sky News, Mr Vince said: “Heckington Fen is a fabulous opportunity; it’s also a massive one, possibly the biggest onshore renewable initiative in Britain.

“The project is shovel-ready with a grid connection in 2028 – something which is increasingly hard to find these days.

“Whilst this is a great project which is going to go ahead, the sums of money required to build this alone in a short timeframe, means we’re looking for investors or partners to help make this happen.”

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Sir Keir Starmer pledges to protect UK companies from Trump tariff ‘storm’

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Sir Keir Starmer pledges to protect UK companies from Trump tariff 'storm'

Sir Keir Starmer has said his government stands ready to use industrial policy to “shelter British business from the storm” after Donald Trump’s new 10% tariff kicked in.

The UK was among a number of countries hit with the lowest import duty rate following the president’s announcement on 2 April – which he called ‘Liberation Day’, while other nations, such as Vietnam, Cambodia and China face much higher US levies.

But a global trade war will hurt the UK’s open economy.

The prime minister said “these new times demand a new mentality”, after the 10% tax on British imports into America came into force on Saturday. A 25% US levy on all foreign car imports was introduced on Thursday.

It comes as Jaguar Land Rover announced it would “pause” shipments to the US for a month, as firms grapple with the new taxes.

On Saturday, the car manufacturer said it was working to “address the new trading terms” and was looking to “develop our mid to longer-term plans”.

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Jobs fears as Jaguar halts shipments

Referring to the tariffs, Sir Keir said “the immediate priority is to keep calm and fight for the best deal”.

Writing in The Sunday Telegraph, he said that in the coming days “we will turbocharge plans that will improve our domestic competitiveness”, adding: “We stand ready to use industrial policy to help shelter British business from the storm.”

It is believed a number of announcements could be made soon as ministers look to encourage growth.

NI contribution rate for employers goes up

From Sunday, the rate of employer NICs (national insurance contributions) increased from 13.8% to 15%.

At the same time, firms will also pay more because the government lowered the salary threshold at which companies start paying NICs from £9,100 to £5,000.

Also, the FTSE 100 of leading UK companies had its worst day of trading since the start of the pandemic on Friday, with banks among some of the firms to suffer the sharpest losses.

Sir Keir said: “This week, the government will do everything necessary to protect Britain’s national interest. Because when global economic sands are shifting, our laser focus on delivering for Britain will not. And these new times demand a new mentality.”

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Trump defiant despite markets

UK spared highest tariff rates

Some of the highest rates have been applied to “worst offender” countries including some in Southeast Asia. Imports from Cambodia will be subject to a 49% tariff, while those from Vietnam will face a 46% rate. Chinese goods will be hit with a 34% tariff.

Imports from France will have a 20% tariff, the rate which has been set for European Union nations. These will come into effect on 9 April.

Read more:
Red wall on Wall Street – but Trump undeterred
How will UK respond to Trump’s tariffs?

Sir Keir has been speaking to foreign leaders on the phone over the weekend, including French President Emmanuel Macron, Italian Prime Minister Giorgia Meloni and Australian Prime Minister Anthony Albanese, to discuss the tariff changes.

A Downing Street spokesperson said of the conversation between Sir Keir and Mr Macron: “They agreed that a trade war was in nobody’s interests but nothing should be off the table and that it was important to keep business updated on developments.

“The prime minister and president also shared their concerns about the global economic and security impact, particularly in Southeast Asia.”

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Trump’s warning

Mr Trump has warned Americans the tariffs “won’t be easy”, but urged them to “hang tough”.

In a post on his Truth Social platform, he said: “We are bringing back jobs and businesses like never before.

“Already, more than FIVE TRILLION DOLLARS OF INVESTMENT, and rising fast!

“THIS IS AN ECONOMIC REVOLUTION, AND WE WILL WIN. HANG TOUGH, it won’t be easy, but the end result will be historic.”

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Santander UK lines up ex-Treasury chief Scholar as new chair

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Santander UK lines up ex-Treasury chief Scholar as new chair

Sir Tom Scholar, the former top Treasury civil servant sacked by Liz Truss during her premiership, is being lined up as the next chairman of Santander UK, Britain’s fifth-biggest high street bank.

Sky News has learnt that Sir Tom, who played a pivotal role in the UK’s response to the 2008 financial crisis, is the leading candidate to replace William Vereker.

The appointment, which is subject to regulatory approval, could be announced later in the spring, according to insiders.

Sir Tom’s prospective recruitment comes amid a period of intense speculation about the future of Santander UK, which bulked up rapidly during the banking crisis by absorbing Alliance & Leicester and Bradford & Bingley.

The Spanish banking giant entered the British retail market in 2004 when it bought Abbey National, setting in motion a chain of dealmaking which would result in it becoming a serious challenger to Barclays, Lloyds Banking Group and NatWest Group.

If confirmed in the role, Sir Tom will follow a pattern of former senior public officials in taking on the chairmanship of Santander UK.

The post has been held in the past by Baroness Vadera, a Treasury minister during the 2008 meltdown, and Lord Burns, the former Treasury permanent secretary.

Sir Tom also held that latter role until his ousting during the shortlived Truss government, which led to him receiving a payoff of more than £350,000.

In addition to his position during the banking crisis, he was instrumental in devising the COVID-19 furlough scheme, which protected millions of private sector jobs during the series of lockdowns imposed on the British public.

He was widely respected among international banking regulators and finance ministers, and his sacking by Ms Truss sparked fury among senior civil servants.

Since leaving the Treasury, he has been appointed as chair of the European operations of Nomura, the Japanese bank.

At Santander UK, he will work closely with Mike Regnier, the former building society boss who has been its chief executive since 2022.

In recent months, there has been growing speculation that Santander UK’s parent is open to a sale of the business amid frustration about the scope and burden of British banking regulation.

Both Barclays and NatWest have been sounded out about a potential merger of their UK retail businesses with that of Santander UK, although formal talks have not progressed to a meaningful stage.

Ana Botin, Santander’s group executive chair, has appeared to publicly rule out a disposal, saying that the UK remains a “core market” for the group.

An attractively priced offer could yet gain Ms Botin’s attention, according to people close to the earlier talks.

One insider said, however, that Sir Tom’s recruitment was likely to dampen further speculation about a possible sale of the British business.

Shares in the Madrid-listed parent company, Banco Santander, have performed strongly in recent months, but fell by more than 8% on Friday as investors digested the fallout from President Donald Trump’s global tariffs blitz.

The company now has a market capitalisation of about €83.25bn (£70.7bn).

City sources said the search for Mr Vereker’s successor had been led by Heidrick & Struggles, the headhunter, in conjunction with Baroness Morgan, the former cabinet minister who sits on Santander UK’s board as its senior independent director.

This weekend, Santander UK said in a statement issued to Sky News: “Santander UK is conducting a thorough appointment process.

“The new chair will be announced once that process has concluded, including having obtained board and regulatory approval.”

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