Virgin Atlantic takes flight with surprise plot to land on London stock market

Published

4 years ago

August 7, 2021

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Sir Richard Branson’s Virgin Atlantic Airways is plotting a surprise flotation on the London Stock Exchange as it pins its hopes on a rapid rebound in transatlantic travel.

Sky News has learnt that Virgin Atlantic has been holding talks with institutional investors about making its public market debut just five months after landing a fresh £160m capital injection.

City sources said this weekend that institutions’ response to management presentations led by the airline’s executives had been positive, and that an autumn announcement of an intention to float now looked likely.

An initial public offering (IPO) would mark 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.

Bankers at Citi and Barclays have been hired to oversee the listing, according to insiders.

Virgin Atlantic is majority-owned by Sir Richard’s Virgin Group, which holds a 51% stake.

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.

Selling shares to the public would inevitably mean Virgin’s stake being diluted unless Sir Richard elected to subscribe for new equity in the IPO.

A flotation of Virgin Atlantic would be another milestone for an airline which has been among the industry’s worst-hit by the pandemic, largely because of its dependence on lucrative UK-US flights.

Last September, it assembled a £1.2bn rescue package which included a £200m injection from its founder, a loan from the American hedge fund Davidson Kempner Capital Management, and substantial contributions from existing creditors.

That restructuring was implemented on a solvent basis, but only after administrators had been placed on standby.

The aviation industry’s failure to stage a rapid recovery amid continued travel restrictions led Virgin Atlantic to seek a total of approximately £300m more – in two instalments – that was generated by the sale of several Dreamliner aircraft and a further loan from Virgin Group.

Virgin Atlantic is not in urgent need of new funding, with adequate financing in place to see it through the next few months, according to insiders.

However, executives including Sir Richard are said to back the idea of a listing to provide additional future opportunities to raise money during the post-COVID recovery and beyond.

A presentation to City investors made in the last few days is said to focus on Virgin Atlantic’s strong positioning to take advantage of pent-up demand for international travel.

Bookings on the key New York-to-London route are said to have surged by 150% this month, although the industry continues to seek further concessions from the Biden administration to open up travel to the US for fully vaccinated passengers.

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

Going public would bring Virgin Atlantic into line with many of its publicly traded peers, such as British Airways’ parent International Airlines Group, easyJet, Ryanair, American Airlines and Cathay Pacific.

Between them, IAG and easyJet have raised billions of pounds to steer them through the COVID-19 crisis, although they are likely to require further funding given that many executives do not believe pre-coronavirus levels of demand will be seen again until 2024.

Virgin Atlantic 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 this week after more than a year of setbacks.

Nevertheless, the billionaire tycoon has been buoyed by the performance on the New York stock market of Virgin Galactic, which has soared in value and enabled him to raise hundreds of millions of pounds to prop up struggling leisure and travel businesses.

Last month, 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 in the process of taking Virgin Orbit 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.

Business

US-EU trade war fears reignite as Europe strikes back at Trump’s threat

Published

6 hours ago

May 24, 2025

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US-EU trade war fears reignite as Europe strikes back at Trump's threat

Fears of a US-EU trade war have been reignited after Europe refused to back down in the face of fresh threats from Donald Trump.

The word tariff has dominated much of the US president’s second term, and he has repeatedly and freely threatened countries with them.

Money blog: Trump sends message to UK on energy bills

This included the so-called “liberation day” last month, where he unleashed tariffs on many of his trade partners.

On Friday, after a period of relative calm which has included striking a deal with the UK, he threatened to impose a 50% tariff on the EU after claiming trade talks with Brussels were “going nowhere”.

The US president has repeatedly taken issue with the EU, going as far as to claim it was created to rip the US off.

However, in the face of the latest hostile rhetoric from Mr Trump’s social media account, the European Commission – which oversees trade for the 27-country bloc – has refused to back down.

EU trade chief Maros Sefcovic said: “EU-US trade is unmatched and must be guided by mutual respect, not threats.

“We stand ready to defend our interests.”

Fellow EU leaders and ministers have also held the line after Mr Trump’s comments.

Polish deputy economy minister Michal Baranowski said the tariffs appeared to be a negotiating ploy, with Dutch deputy prime minister Dick Schoof said tariffs “can go up and down”.

French trade minister Laurent Saint-Martin said the latest threats did nothing to help trade talks.

He stressed “de-escalation” was one of the EU’s main aims but warned: “We are ready to respond.”

Mr Sefcovic spoke with US trade representative Jamieson Greer and commerce secretary Howard Lutnick after Mr Trump’s comments.

Mr Trump has previously backed down on a tit-for-tat trade war with China, which saw tariffs soar above 100%.

Sticking points

Talks between the US and EU have stumbled.

In the past week, Washington sent a list of demands to Brussels – including adopting US food safety standards and removing national digital services taxes, people familiar with the talks told Reuters news agency.

In response, the EU reportedly offered a mutually beneficial deal that could include the bloc potentially buying more liquefied natural gas and soybeans from the US, as well as cooperation on issues such as steel overcapacity, which both sides blame on China.

Stocks tumble as Trump grumbles

Major stock indices tumbled after Mr Trump’s comments, which came as he also threatened to slap US tech giant Apple with a 25% tariff.

The president is adamant that he wants the company’s iPhones to be built in America.

The vast majority of its phones are made in China, and the company has also shifted some production to India.

Shares of Apple ended 3% lower and the dollar sank 1% versus the Japanese yen and the euro rose 0.8% against the dollar.

Business

British taxpayers’ £10.2bn loss on bailout of RBS

Published

13 hours ago

May 23, 2025

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British taxpayers' £10.2bn loss on bailout of RBS

British taxpayers are set to swallow a loss of just over £10bn on the 2008 rescue of Royal Bank of Scotland (RBS) as the government prepares to confirm that it has offloaded its last-remaining shares in the lender as soon as next week.

Sky News can reveal the ultimate cost to the UK of saving RBS – now NatWest Group – from insolvency is expected to come in at about £10.2bn once the proceeds of share sales, dividends and fees associated with the stake are aggregated.

The final bill will draw a line under one of the most notorious bank bailouts ever orchestrated, and comes nearly 17 years after the then chancellor, Lord Darling, conducted what RBS’s boss at the time, Fred Goodwin, labelled “a drive-by shooting”.

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Insiders believe a statement confirming the final shares have been sold could come in the latter part of next week, although there is a chance that timetable could be extended by a number of days.

The chancellor, Rachel Reeves, is likely to make a statement about the milestone, although insiders say the Treasury and the bank are keen to simply mark the occasion by thanking British taxpayers for their protracted support.

A stock exchange filing disclosing that taxpayers’ stake had fallen below 1% was made last week, down from over 80% in the years after the £45.5bn bailout.

The stake now stands at 0.26%, meaning the final shares could be offloaded as early as the middle of next week, depending upon demand.

Total proceeds from a government trading plan launched in 2021 to drip-feed NatWest stock into the market have so far reached £12.8bn.

Based on the bank’s current share price, the remaining shares should fetch in the region of £400m, taking the figure to £13.2bn.

In addition, institutional share sales and direct buybacks by NatWest of government-held stock have yielded a further £11.5bn.

Dividend payments to the Treasury during its ownership have totalled £4.9bn, while fees and other payments have generated another £5.6bn.

In aggregate, that means total proceeds from NatWest since 2008 are expected to hit £35.3bn.

Under Rick Haythornthwaite and Paul Thwaite, now the bank’s chairman and chief executive respectively, NatWest is now focused on driving growth across its business.

It recently tabled an £11bn bid to buy Santander UK, according to the Financial Times, although no talks are ongoing.

Mr Thwaite replaced Dame Alison Rose, who left amid the crisis sparked by the debanking scandal involving Nigel Farage, the Reform UK leader.

Sky News recently revealed that the bank and Mr Farage had reached an undisclosed settlement.

During the first five years of NatWest’s period in majority state ownership, the bank was run by Sir Stephen Hester, now the chairman of easyJet.

Sir Stephen stepped down amid tensions with the then chancellor, George Osborne, about how RBS – as it then was – should be run.

Lloyds Banking Group was also in partial state ownership for years, although taxpayers reaped a net gain of about £900m from that period.

Other lenders nationalised during the crisis included Bradford & Bingley, the bulk of which was sold to Santander UK, and Northern Rock, part of which was sold to Virgin Money – which in turn has been acquired by Nationwide.

NatWest declined to comment on Friday.

A Treasury spokesperson said: “We now own less than 1% of shares in NatWest which is a significant step towards returning the bank to private ownership and delivering value for money for taxpayers.

“We are on track to exit the shareholding soon, subject to sales achieving value for money and market conditions.”

Business

Trump threatens EU with 50% tariff – as Apple faces 25% unless iPhones are made in US

Published

13 hours ago

May 23, 2025

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Trump threatens EU with 50% tariff - as Apple faces 25% unless iPhones are made in US

Donald Trump has threatened to impose a 50% tariff on the EU, starting from next month, after saying that trade talks with Brussels were “going nowhere”.

Mr Trump made the comments on his Truth Social platform.

It marks a fresh escalation in his trade row with the European Union, which he has previously accused of being created to rip off the US.

While the US has done deals with the UK and China to reduce their peak exposure to his trade war, the president’s EU threat, which would cover all EU imports to the US, would risk retaliatory measures from Brussels if carried through.

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Mr Trump said of talks between his administration and the EU: “Our discussions with them are going nowhere! “Therefore, I am recommending a straight 50% tariff on the European Union, starting on June 1, 2025. There is no tariff if the product is built or manufactured in the United States.”

The European Commission was yet to respond to the remarks. Officials signalled there would be no comment until after a call between top US-EU trade figures due later on Friday.

Financial markets, however, were quick to take a view. European stock markets were sharply down across the board.

The FTSE 100 in London was more than 1.2% lower shortly after the Truth Social post appeared, while Germany’s DAX and the French CAC 40 were in the red to the tune of more than 2%.

US stock markets fell at the open on Wall Street. The tech-focused Nasdaq was down more than 1%.

The potential for damage to the global economy saw Brent crude oil sink by more than 1% to $63 a barrel.

The dollar took a hit too, as the news only intensified existing market worries this week about the sustainability of US government debt levels.

The pound was trading at levels last seen in February 2022.

Mr Trump said earlier that Apple will be forced to pay 25% tariffs on its iPhones unless it moves all its manufacturing to the US.

Apple shares dropped more than 2% in premarket trading after the warning, also posted on Truth Social.

“I have long ago informed Tim Cook of Apple that I expect their iPhones that will be sold in the United States of America will be manufactured and built in the United States, not India, or any place else,” wrote the president.

“If that is not the case, a tariff of at least 25% must be paid by Apple to the US.”

Production of Apple’s flagship phone happens primarily in China and India, which has been an issue brought up repeatedly by Mr Trump.

On Thursday, the Financial Times reported Apple was planning to expand its India supply chain through a key contractor.

Taiwanese company Foxconn is planning to build a new factory in the Indian state of Tamil Nadu, according to the paper, to help supply Apple.

Sky News has contacted Apple for comment.