Virgin Atlantic uses equity to tackle fears over the environment

Written by Lindsay Ellis, CNN Virgin Atlantic has launched a Pandemic Securities loan facility offering companies and their investors the option to purchase shares in the airline. The deal, which the airline launched Wednesday…

Virgin Atlantic uses equity to tackle fears over the environment

Written by Lindsay Ellis, CNN

Virgin Atlantic has launched a Pandemic Securities loan facility offering companies and their investors the option to purchase shares in the airline.

The deal, which the airline launched Wednesday and that requires no financial backing from the airline, makes it more attractive for large investors to buy in and benefit from a possible recovery in sentiment.

Pandemic will make a loan to shareholders of an airline company against its share value. Shareholders will receive a small commission for taking out the loan, with a duration of 36 months to five years. The loan will start when the current shareholder of the airline’s stock as of the 25th trading day preceding the financing transaction.

Virgin Atlantic CEO Craig Kreeger said the pandemic financing facility was being launched “during an unprecedented period of uncertainty which creates an inherent investment opportunity.”

“Current market conditions present an ideal opportunity for shareholders to benefit from a potential recovery in sentiment and we see this as an excellent way to meet shareholders’ appetite for the airline’s shares and build shareholder value,” he said.

Virgin Atlantic is acting alone on the new facility, and the idea was the brainchild of Robert Traverso, an analyst and the president of Virgin Atlantic’s investor relations.

Virgin Atlantic, British Airways and Qantas Group acquired their respective shareholdings in Virgin Atlantic’s parent company, Richard Branson’s Virgin Group, in 1981 and 1984.

Other global airlines have also recently announced strategic moves to cash in on a possible recovery in sentiment.

Qantas has introduced a dividend payout for investors, A380 aircrafts, and restructured the airline business, while British Airways announced the launch of a new London-Los Angeles flight, aimed at targeting high-spending business travelers, and announced new strategic partnerships with aircraft manufacturer Airbus and industrial firm Delta Air Lines.

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