Virgin Atlantic has secured a £1.2bn rescue package that will salvage thousands of British aviation jobs, it has been reported.
The package would remove the chance of the airline plunging into administration as a result of the coronavirus crisis.
The deal, which will involve backing from Sir Richard Branson's Virgin Group and US hedge fund Davidson Kempner, could be confirmed later today.
The government is not involved in the rescue package, though the airline will be using a new-court sanctioned process introduced by a government reform.
That reform was introduced to enable smoother corporate restructurings amid the coronavirus crisis.
In total, the restructuring will be worth up to £1.2 billion over 18 months and it will also allow Sir Richard to retain a controlling interest in the airline. He currently owns 51 per cent of the business.
Virgin Atlantic has secured a £1.2bn rescue package that will salvage thousands of British aviation jobs
The deal, which will involve backing from Richard Branson's Virgin Group and hedge fund Davidson Kempner, could be confirmed later on Tuesday
The Virgin Group will inject £200 million into the airline, while Davidson Kempner will lend £170 million.
Virgin Group and Delta Air Lines, Virgin Atlantic's two shareholders, will collectively defer approximately £400 million of fees.
In the last few hours the backing of First Data, a subsidiary of Nasdaq-listed US firm Fiserv, which had previously made onerous demands relating to cash collateral, is understood to have been secured, enabling the deal to go ahead, according to banking sources.
Sky News reported that the signatures of First Data was 'the final piece of the jigsaw' in securing a package that would provide breathing space for Virgin Atlantic to trade during the crisis.
Another £200m or more is expected to be generated by cost savings under a plan drawn up by Shai Weiss, the airline's chief executive.
The bailout, and Sir Richard retaining a controlling stake, will vindicate the government's decision to resist Sir Richard's plea for financial support from the taxpayer.
Owner Sir Richard previously warned that Virgin Atlantic will collapse unless it receives £500 million in UK taxpayer support.
He previously offered his £80 million private island as collateral against any bailout. It is unclear if his private paradise Necker Island was offered in the deal.
Branson, 69, had asked the British Government for a £500 million loan —and offered to mortgage Necker Island, his private Caribbean retreat believed to be worth £80 million
The Virgin Group boss previously said the airline needs taxpayer support in the form of a commercial loan
A spokeswoman for Virgin Atlantic declined to comment on the report.
The airline previously axed 3,150 jobs and cease operations at Gatwick Airport as it battled for survival amid the coronavirus crisis.
The airline - owned by Sir Richard Branson - axed a third of its workforce and will cease operations at Britain's second largest airport, with some of the routes being switched to Heathrow.
The company said 'unprecedented market conditions' as a result of the coronavirus pandemic had 'severely reduced revenues'.
Chief executive Shai Weiss previously said: 'We have weathered many storms since our first flight 36 years ago, but none has been as devastating as Covid-19 and the associated loss of life and livelihood for so many.
'However, to safeguard our future and emerge a sustainably profitable business, now is the time for further action to reduce our costs, preserve cash and to protect as many jobs as possible.
The airline - owned by Sir Richard Branson - axed a third of its workforce and ceased operations at Britain's second largest airport
Virgin Atlantic planes sit empty at Gatwick as airline pulls out
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'It is crucial that we return to profitability in 2021. I wish it was not the case, but we will have to reduce the number of people we employ.'
He added: 'After 9/11 and the Global Financial Crisis, we took similar painful measures but fortunately many members of our team were back flying with us within a couple of years.
HOW DID RICHARD BRANSON MAKE HIS MONEY?
Richard Branson is the founder and chairman of Virgin Group, which started with Virgin Records in 1972 and now employs more than 70,000 people across 35 countries.
His empire has included airlines, radio stations, nightclubs, a Formula One team and health clubs - and the tycoon is estimated to be worth more than $4 billion.
Branson started out at age 16 in the 1960s with the magazine called Student - which sold nearly $8,000 worth of advertising in its first issue - with the ambitious young businessman dropping out of school to focus on the publication.
He then started his record business in 1969, moving on to launch Virgin Mail Order Records, using the profits to found the Virgin Records music label in 1972, according to Investopedia.
His success was in part due to his willingness to sign artists who were controversial at the time, including the Sex Pistols, with other popular performers including Ozzy Osbourne and The Rolling Stones.
In 1979 Branson bought Necker Island for $180,000, and went on to start one of his most iconic companies, Virgin Atlantic, in 1984, with the airline achieving success due to its creative in-flight comforts.
After selling Virgin Records for $1 billion to keep Virgin Atlantic going, Branson went on to be knighted in 2000 and has remained one of Britain's most well-known entrepreneurs.
'Depending on how long the pandemic lasts and the period of time our planes are grounded for, hopefully the same will happen this time.'
The British Airline Pilots Association (BALPA) said it was a terrible blow for the industry, and urged the government to stop 'prevaricating' and help the aviation sector.
'Government should call a moratorium on job losses in aviation and lead a planned recovery,' BALPA General Secretary Brian Strutton said.
The under-pressure airline also announced it will not return to using its seven Boeing 747-400 aircraft, which have four engines.
By 2022 it will operate a 'simplified, greener fleet' of 36 twin-engine aircraft, which are more fuel efficient.
Sir Richard previously revealed that he is selling a £400m stake in his space exploration business to prop up the rest of his ailing empire.
The billionaire plans to sell 25m shares or 12 per cent of New York-listed Virgin Galactic.
His company Virgin Group said it would use the proceeds 'to support its portfolio of global leisure, holiday and travel businesses that have been affected by the unprecedented impact of Covid-19'.
It will mean that the entrepreneur loses his controlling stake in the space exploration company, with his ownership falling below 43 per cent.
Virgin Galactic was founded by Sir Richard in 2004 and had initially hoped to launch tourist flights into space by 2009.
But the mission has been beset by a series of delays, not least the death of copilot Michael Alsbury during a disastrous test flight of the VSS Enterprise craft in 2014.
Tickets for the space flights first went on sale in 2004 for $200,000 each and the price was later raised to $250,000 (£200,000).
Sir Richard owns 115m shares in Virgin Galactic, or 55 per cent, worth around £1.9 billion before he announced his intention to sell.
In April, Virgin Australia went into administration, due to the impact of the pandemic and other financial issues.
It was purchased by American private equity group Bain Capital last month
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Source: DailyMail-UK