Richard Branson offers Necker Island as collateral to save Virgin

In an open letter to his staff, Richard Branson, worth £4bn, says he doesn’t have the cash to save Virgin but offers his Caribbean island retreat Necker as collateral.

Richard Branson has offered Necker Island as collateral in return for a £500m loan to save Virgin Atlantic.

Virgin Group chief Sir Richard Branson has offered his Caribbean island retreat Necker as collateral in return for a £500m government loan, to help save the troubled airline.

While the Virgin Group’s airline in Australia faces administration, his other airline, Virgin Atlantic, owned 49 per cent by Delta, is also in trouble. So far the Australian government has refused a request for a A$1.4bn loan for Virgin Australia, which is also owned by Etihad, Singapore Airlines and China’s HNA.

In an open letter to his staff on Monday, Sir Richard said: “The brilliant Virgin Australia team is fighting to survive and need support to get through this catastrophic global crisis.

“We are hopeful that Virgin Australia can emerge stronger than ever, as a more sustainable, financially viable airline.”

He warned: “If Virgin Australia disappears, Qantas would effectively have a monopoly of the Australian skies. We all know what that would lead to.”

The Branson Family on Necker in 2013: Daughter Sally Branson with husband Fred Andrews, Richard Branson's wife Joan Templeman, Son Sam Branson with his wife Isabella.

Sir Richard, believed to be worth around £4bn, has turned to the British government as well to help to bail out the airlines, hit hard by the coronavirus pandemic and lockdowns in various countries around the world.

Sir Richard said the crisis was unprecedented but said he didn’t have cash in a bank account ready to withdraw.

He said: “I’ve seen lots of comments about my net worth — but that is calculated on the value of Virgin businesses around the world before this crisis, not sitting as cash in a bank account ready to withdraw.

“Over the years significant profits have never been taken out of the Virgin Group, instead they have been reinvested in building businesses that create value and opportunities.”

He added: “Many airlines around the world need government support and many have already received it.’’

An open letter to our Virgin family. For 50 years I have been humbled by the incredible pride our people take in working for Virgin. Here are the facts about Virgin businesses: https://t.co/Nv1RLBhp3j pic.twitter.com/BneE0mZ0Zg

— Richard Branson (@richardbranson) April 20, 2020

Sir Richard said his “beautiful Necker Island, along with other Virgin assets will be used as collateral to try and save as many jobs as possible’’ across the group.

Sir Richard said: “We will do everything we can to keep the airline [Virgin Atlantic] going — but we will need government support to achieve that in the face of the severe uncertainty surrounding travel today and not knowing how long the planes will be grounded for.

“This would be in the form of a commercial loan — it wouldn’t be free money and the airline would pay it back (as EasyJet will do for the £600m loan the government recently gave them).”

He said Virgin Atlantic started with one plane 36 years ago. “Over those years it has created real competition for British Airways, which must remain fierce for the benefit of our wonderful customers and the public at large.

“The same is true in Australia, where the brilliant Virgin Australia team is fighting to survive and need support to get through this catastrophic global crisis.’’

Richard Branson’s Necker Island. Picture: Virgin Limited Edition

Sir Richard said in his missive to staff: “Over the five decades I have been in business, this is the most challenging time we have ever faced.

“It is hard to find the words to convey what a devastating impact this pandemic continues to have on so many communities, businesses and people around the world.

“From a business perspective, the damage to many is unprecedented and the length of the disruption remains worryingly unknown.

“We’re doing all we can to keep those businesses afloat and I am so thankful to all of you who have continued to work so hard in these difficult times,” he said, announcing Virgin had already committed a quarter of a million dollars to protect businesses and jobs.

“We will continue to invest all we can. The reality of this unprecedented crisis is that many airlines around the world need government support and many have already received it. Without it there won’t be any competition left and hundreds of thousands more jobs will be lost, along with critical connectivity and huge economic value.”